It’s a seller’s market: Used car prices hit another all-time high
Used car prices have hit another record-high. Photo: Getty
Selling your car could be an easy way to make a quick buck during the coronavirus recession.
Research by Moody’s Analytics and Datium Insights shows used vehicle prices rose for the fifth straight month in September to hit another all-time high.
Average prices jumped 3.8 per cent over the month as persistent weakness in the new vehicles market and aversion to public transport left too many buyers chasing too few cars.
A 2006 Nissan Patrol ST, for example, was selling for $15,510 more in September 2020 than in September 2019, with buyers forking out an average of $38,500 for the car, according to Carsales.com.au.
(The 2017 Holden Special Vehicle GTS R experienced the biggest annual median price increase – rising by $51,990 to $169,990 – but that’s unsurprising given no more Holdens are rolling off the production line.)
As Moody’s Analytics economist Michael Brisson put it: “The limited sales [of new cars] and thus limited used-vehicle supply continue to support the price increases in the wholesale used-vehicle market.”
So, how can sellers get the most money for their car?
The first step is to research the market so you can appropriately price your car. Otherwise you run the risk of pricing it too high and attracting limited interest, or pricing it too low and underselling yourself, which would leave you out of pocket if you wanted to buy a replacement.
Carsales.com.au has a function that allows users to search their car model to find out the average price at which other sellers have recently listed it.
And affiliate company, Redbook.com.au, allows users to find out the median price at which it has recently sold.
2. Preparing the car for sale
No one wants to buy a dirty car, so it’s essential to thoroughly clean the vehicle before taking photos for your listing.
Carsales.com.au technical editor Ken Grattan said it’s worth spending a couple hundred dollars getting the car professionally detailed, as the service could add thousands of dollars to the sale price in today’s market.
“A car detailer is someone who goes through and doesn’t just wash the car and vacuum the carpets,” Mr Grattan told The New Daily.
“He will make sure that every large spec of brake pad dust is removed from the alloy wheels. He’ll apply tyre black or tyre shine to the tyres.
“He will have the car properly waxed and polished. The glass will be cleaned. Everything will be done to make it look as close to new condition as is possible.”
3. Taking photos and writing the ad
Now your car is glistening in the sun, it’s time to capture it in all its beauty.
Mr Grattan recommends using a dark background when photographing a bright-coloured car and the opposite when photographing a dark-coloured car.
The angles required?
A 3/4 front, a 3/4 rear, a side view, a front view, a rear view, interior shots, a picture of the boot, and a shot of the engine bay. Plus photos of some of the features in action, such as the split-folding rear seats.
Mr Grattan said it’s also important to keep an eye on the exposure and flash settings on your camera or smartphone “to avoid the colour being so bright that it burns out the picture” and eliminates “the sculpture lines”.
“You want the car to show up in all its infinite detail, basically.”
Holden’s demise has boosted the value of cars wearing the iconic badge.
And then there’s the writing part.
Mr Grattan recommends keeping it concise but adding a bit of colour and explaining why you like the car – rather than just listing its features.
“What you like about the car is what other prospective buyers will also like about it,” he said, noting most sites will prompt you to include all the necessary details so you can focus on appealing to people’s emotions.
So the advertisement might start with, “The last of the Australian-built Fords, this car has been lovingly cared for …” rather than, “This is a 2017 Ford Falcon fitted with bla bla bla”.
4. Offering a test drive
Allowing the prospective buyer to test drive the car will help get the sale over the line.
But Mr Grattan recommended the following to protect yourself from potential theft:
- Ask for their driving licence – Check they are legally allowed to drive the car you are selling, make sure the photograph matches their face, and write down their details or ask to hold onto their licence while they drive your car
- Ask to hold onto their car keys while they drive – This ensures they have a reason to come back with your car.
Toyota Landcruisers were the most searched for used cars on Carsales.com.au in September. Photo: AAP
5. Handle the negotiation
No need to dust off your best Jerry Maguire impression for this part.
Mr Grattan said you need to negotiate with “the right tone of voice” and avoid being confrontational.
Greet the buyer “in a warm and friendly way”, be polite yet assertive, and set yourself a minimum selling price before starting the negotiation.
And be prepared to walk away from the deal if you think they’re trying to take you for a ride.”
Top ten most searched used cars on Carsales.com.au (September 2020):
- Toyota Landcruiser
- Toyota HiLux
- Ford Ranger
- Holden Commodore
- Toyota Landcruiser Prado
- Toyota Corolla
- Volkswagen Golf
- Mercedes-Benz C-Class
- Mazda 3
- Mitsubishi Triton.