As consumers assimilate back into the world, the national shortage of second-hand vehicles has become even more apparent.
This is due largely to the significant increase in the number of vehicle searches for quality second-hand vehicles as a means of safe, affordable personal transport, post pandemic and the need for reliable cars for intrepid Australians as border restrictions relax over the holiday break.
With this surge in demand, the market climate is well and truly in favour of the seller which poses significant benefits to dealers looking for strategic ways to engage Australian consumers, heading into the new year.
For dealerships selling used and new vehicles, this provides an opportunity to maximise sales potential while still building meaningful relationships with potential buyers.
Second hand in growing demand
According to data from Gumtree Cars, 165 million searches were performed on the site in Q3 of 2020 – a seven per cent increase from Q2 of this year.
Despite this, Australians are holding onto their vehicles for longer with listings in August 2020 down 23% compared to the same month last year.
These findings present a strong opportunity to strike while the market is hot, leveraging consumer confidence and acting as a guide for alternative vehicle purchasing options such as financing or the second-hand vehicle trade in.
Further, we’ve also seen the average listing price for a second-hand vehicle on Gumtree grow by 16% on last year for vehicles priced up to $200,000. This indicates that Australians are doing their research and taking the time to critically evaluate the value of their assets in a seller’s market.
This new group of customers are more knowledgeable and are enjoying the shopping process of searching for their next vehicle purchase, more so than we’ve typically seen in the past.
They’re also willing to move quicker through the purchasing process in order to get a good deal and unwilling to compromise on quality.
Long term recovery for the economy
The uptake in second-hand vehicle demand is a good sign of economic growth ahead.
While there is no doubt that COVID-19 has impacted consumer behaviour with limited freedom of mobility, restricted access to finance and even stock shortages from some manufacturers, ultimately views per listing have increased by 13.3 per cent in August 2020 compared to the same period last year.
Following the Christmas holidays and with summer well and truly here, interstate getaways will be a priority for consumers across the country.
Provision of a reliable, affordable mode of transport to get is the first step in enabling customers to stimulate the wider local economies.
Further, continued improvements in vehicle safety features and automotive manufacturing mean that second-hand vehicles are a prudent investment, lasting longer and holding their value, with the average car model year in Australia dating back to 2006.
As we continue on the road to recovery, dealers are critical in the continued growth of consumer confidence and the revival of the local economy.
As demand continues to rise, these insights will increase morale into the new year.
While we may not be back to the pre-COVID normal, we have certainly seen an increase in customer demand indicating we may be back soon.
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