Every month at Prices People Pay, we analyse new data that our comprehensive used car price database has collected, to provide you the latest insights into the used car market. Here’s our summary for the month of May.
Top Sellers
May saw an increase in supply and transactions as social distancing measures were gradually lifted in large parts of the country.
Supply and transactions are still below normal levels due to concerns about the economic environment, however we’ve seen a strong rebound in prices at the end of the month.
Passenger vehicles continue to retain the bulk of transactions as buyers continue to purchase a greater share of older, cheaper vehicles.
SUV’s returned to selling a greater share than Light Commercials, after a historic role reversal last month.
As social distancing measures are relaxed further across the country we expect transaction activity to also increase on par with a recovery in price.
Toyota has seen a strong presence through this market turmoil, and this continued in May. The top 10 selling cars included 6 Toyota’s. Holden was the only other brand with the Commodore and Colorado making the list.
It’s likely volumes of these Holden will gradually taper off over the next 12 months due to their exit from the market.
May once again saw strong presence from key models such as the Corolla, Ranger, Hilux and Camry. Less common models continue to see depressed levels of stock.
Comparing to last month
As mentioned above, all segments saw a strong bounce back in sales in May with Passenger and SUV seeing bumper swings. Light commercial saw a smaller swing, largely due to the fact it saw less impact to sales as most businesses, particularly those in essential services, continued to transact throughout the quarantine period.
While volume is down overall, we expect this to gain traction over the next few months. With consumers avoiding public transportation, continuation of the governments instant write-off scheme and no end in sight to international travel restrictions, there will surely be demand for used cars backed up by financial incentives.
Looking at individual models, Toyota’s unsurprisingly made the largest gains from last month.
Only 4 Light commercials listed in the Top 20, the Hilux, Ranger, Colorado and Hiace. However, commercials in generally favoured better throughout the past several months as volume had a lesser fallout.
Going into the second half of the year we expect demand from this segment to weaken as business’s reconsider expenditure due to the current economic circumstances. The governments extension of the instant write off scheme will buffer some of this but time will how effective this will be.
Comparing to last year
Year-on-year we’ve seen significant decline across the board.
Passenger vehicles saw a large decline as demand in this segment dried up.
As mentioned earlier, we’re seeing a recovery in the market with greater participation by buyers. Our expectations are that June will see a return to near-normal after 3 months of significant market erosion.
It’s a similar story looking at individual makes as no brand really came out a winner. Only 8 models in the top 20 saw gains, and even then, they were modest.
Even though some of the large volume sellers look to have seen the most decline, on a percentage basis they are faring better than some of the more niche and uncommon brands. For the remainder of the year we expect most of the focus to be on mainstay vehicles like the Ranger, Hilux, Camry as well as small hatchbacks. We expect buyer activity from essential services as well as greater interest in smaller, cheaper vehicles to direct demand towards these areas of the market most.
Data Source
Prices People Pay sources data exclusively from Datium Insights. Feel free to check out their products and services page for more info..
