Plenty of Australians are buying used rather than new, and the reasons are the obvious ones: price, availability, and shifting taste in what people actually want to drive. But "the used car market" isn't one thing. Prices behave very differently depending on the body type, so it's worth looking at hatchbacks, sedans, SUVs and MPVs separately, then at how region, fuel type and sales channel shift the picture.
Hatchbacks
Used hatchback prices rose steadily through the earlier part of 2018 to 2023, pushed up by strong demand and thin supply, then started dropping by late 2023. Not evenly, though. Some models held their value far better than others, and the period saw buyers lean harder towards compact, fuel-efficient cars.
The forecast out to 2032 is mixed. Prices look likely to steady first and then drift up towards the end of the decade, depending on where technology, fuel prices and the broader economy land. In Australia you can buy a hatch in every size, from tiny city cars through small and mid-size hatches up to large luxury models, so "hatchback" covers a wide spread of price behaviour on its own.
Four things move hatchback prices more than anything else. Demand for small, economical cars can drag prices up quickly. The health of the economy and how confident buyers feel sets how much they can actually spend. Newer models with better tech chip away at the resale value of older hatches. And when fuel prices swing, a frugal hatchback suddenly looks more or less appealing.
Sedans
Sedans are drifting down, slowly. Across 2018 to 2023 the index showed a 3.3% drop month-over-month and a 13.1% drop year-over-year, having peaked in May 2022 at 167.4. The interesting split is by age: older sedans, particularly those 8-10 years old, saw the biggest jumps, up 69% on pre-COVID levels.
That decline looks like it has bottomed out. Prices are expected to trend back upwards in 2024, and according to Cox Automotive Australia, dealer-used selling prices stopped falling that year and started edging up again. Economic recovery and steady demand should keep that going into the next decade. SUVs may have taken the spotlight, but sedans still hold a loyal following for fuel economy and price, and demand for them should stay reasonably steady.
SUVs and MPVs
This is where the numbers get striking. Over the past five years SUV prices climbed hard, and the older the SUV, the harder they climbed. SUVs under 2 years old finished July 20% higher on the Price Index than the same age bracket sat in December 2019. For 2-4 year-old SUVs it was 32.6% higher, for 5-7 year-olds 35.9%, and for 8-10 year-olds a full 40.8%. Buyers clearly want older SUVs, not just new ones.
The outlook stays upward, if a little slower. The overall slowdown in used vehicle price growth came from the first decline in used prices for utes and SUVs of 2024, but that decline is gradual and demand is still strong, so any drops should be modest.
Comfort explains a lot of it. Around two-thirds of new vehicle sales in Australia in 2022 were SUVs, which feeds straight into the second-hand market for years afterwards. MPVs don't sell in those numbers, but they hold a real share of their own thanks to how practical they are for larger families. The pull towards both is unlikely to fade.
Regional differences
Where you are in the country changes the deal. In the eastern region, used car prices have been declining steadily. November 2023 data from Moody's Analytics showed a cumulative decline of seven percentage points since May, and that was expected to carry into 2024 — good hunting for buyers chasing newer models.
The west has softened too, just less sharply than the east. Strong new-vehicle supply and local economic conditions keep prices from falling as fast, so your dollar tends to go further there than you'd expect, often into a newer car than you were planning on. Up north and down south, prices have held fairly stable, though vehicle age still swings things: older used cars have seen the biggest proportionate increases over the past few years, while newer, lower-mileage stock hasn't moved as much. The broad softening looks set to run into 2024 across most regions.
Fuel type
Petrol dominates the used market. It made up almost two-thirds of total used car sales in 2023, with diesel next. Diesel is more exposed to rising fuel prices, and that shows up in a real gap between petrol and diesel resale values.
Electric is the wild card. The used EV and PHEV market is thin on models, which makes it volatile — the price indexes across age brackets aren't holding up as well as they do for petrol, diesel or hybrid cars, and that makes future prices hard to call for buyers and sellers alike. Hybrids sit somewhere in between. Green vehicles overall, meaning hybrid, electric and PHEV combined, were less than 4% of the used car market in 2023, but hybrids hold their price more steadily than pure EVs, which appeals to buyers who want something greener without the price swings. Expect that slice of the market to grow as more people go looking for it.
Online versus in-person
Online buying keeps growing. Rapid digitalisation lets people browse inventory from the couch, with photos, price comparisons and offers you won't always get in a yard. That convenience pulls more buyers online every year.
Yards still matter, though. In-person still holds a big share, largely because you can inspect and test a second-hand car before you commit, and for a lot of buyers that hands-on check is the whole point. Which channel wins for you really comes down to convenience versus wanting to see the car in the metal.
The economics underneath
The wider economy sits behind all of this. A strong economy means more disposable income and stronger demand for used cars; a downturn tightens budgets and softens it. Fuel prices, interest rates, changing consumer preferences and supply factors all feed into the cost as well.
Government policy pulls too. Rules on emissions, safety standards and imports shape what's available and what it costs — tighter emissions standards, for instance, can thin out older cars and push up prices for compliant ones. Consumer confidence works much the same way. When people feel good about their finances they're readier to make a big purchase like a car; when they don't, they hold off, demand drops and prices can follow. And supply is genuinely hard to predict, because it leans on imports, on owners deciding to sell, and on replacement buyers coming through, which makes the second-hand market's growth uneven.
Put it together and the used market is still growing, with each body type running on its own clock. Hatchbacks softening after a run-up, sedans bottoming out and turning, older SUVs climbing hardest of all. One forecast has the market reaching USD 77.94 billion by 2033. If you want to see how these factors land on a specific car before you buy, check its history with us first.
