Independent economist Tarric Brooker has posted the below chart on Twitter showing that the number of used cars listed on Carsales.com.au has hit a new record high “as levels of financial stress rise”:
At the same time, “Aussie used car prices have hit their lowest level since October 2021”:
On the flipside, new car sales continue to trend higher, led by strong growth in SUVs:
This dichotomy between used and new car sales is likely explained by the fact that roughly two-thirds of the population – namely tenants and mortgage holders – are being squeezed hard by soaring rents and interest rates.
They are likely the ones selling-off surplus cars for cash.
On the other hand, around one-third of the population (mainly baby boomers) own their homes outright and are not being negatively impacted by rising rents nor interest rates.
Australian households aged over 65 also accumulated the overwhelming majority of savings over the pandemic, followed by 55-64 aged households:
I suspect these cohorts are behind the rebound in new car sales.
