The latest quarterly data from Moody’s Analytics is available and it shows a softening of used car prices during August and September when NSW and VIC were is the middle of the latest lockdowns.
The Datium Insights-Moody’s Analytics Price Index shows used-auto prices have fallen by almost 5% since the peak reached in July.
There’s no need for Fleet Managers to panic yet, according the weekly update from Datium Insights, three year old Ford Rangers are still selling for 75% of their new car price. Most of the top fleet and novated vehicles are well above long term residual value forecasts with the unbreakable Toyota Hilux still worth 87% of the new sales price after three years.
According to the Moody’s Analytics Autocycle residual value forecasting tool, a 2020 toyota Hilux that has been driven 15,000 kilometers per year starting in January 2020 is worth the same amount today as the day it was driven off the dealer’s lot.
It’s a great time to consider a fleet changeover over to lock in the gains while the used car market is string. Or, a sale and leaseback if your business needs a cash injection because prices remain 11% higher than last September and 36% higher than before the COVID-19 recession.
Delays to new vehicles deliveries are still the main driver of high prices with models facing long delays remaining attractive to buyers. Car manufacturers are providing regular updates to fleet customers though some companies are now blending makes and models to satisfy the demand for fleet replacements. The winners are the car manufacturers that can get their hands on enough stock to supply retail, novated and fleet buyers.
The report from Moody’s Analytics showed that auctions houses have suffered with low numbers since 2020. This is caused by the disruption to normal replacement cycles. Fleets are holding onto cars because they can’t get new ones; and consumers are facing economic uncertainty and reduced travel since working from home.
Strong used car prices are expected to continue well into 2023, so Fleet Managers should keep working closely with manufacturers and dealers to get the older vehicles sold before the party ends.
