Used-car prices log third straight quarterly fall as supply finally catches up

The used-car market is finally behaving like one again. Wholesale values eased for a third consecutive quarter through September, dragging the price of the average three-year-old car roughly eight per cent below its 2023 peak. Dealers we spoke to in Sydney and Melbourne describe yards that are fuller than they have been since before the pandemic, with stock turning over in weeks rather than days.

The story behind the slide is supply. Fleet cycles that were frozen during the production crunch have restarted, releasing a wave of three-to-five-year-old vehicles onto the wholesale market at the same time. Rental companies, in particular, have begun defleeting in volume, which is why near-new dual cabs and mid-size SUVs are suddenly everywhere. More metal on the ground means more competition, and competition is the only thing that reliably lowers prices.

“The story behind the slide is supply.”

Not everything is getting cheaper. Late-model diesel utes have been remarkably stubborn, holding within a couple of per cent of last year's values as trade demand keeps chewing through supply. Hilux, Ranger and D-Max dual cabs remain the backbone of the market, and a tidy example with logbooks still sells within a fortnight. If you are selling one, conditions remain firmly in your favour; buyers should expect to negotiate rather than wait.

Electric vehicles are the outlier in the other direction. Values on three-year-old EVs continue to fall faster than the broader market as improved new-model range and pricing reset expectations every year. For buyers on a budget that is genuinely good news: a 2020-vintage EV with a healthy battery report can now be had for the price of a mid-spec petrol hatch, with running costs a fraction of the equivalent diesel.

So is now the time to buy? If you have been waiting out the frenzy, the answer is probably yes. Prices are drifting, not collapsing, and sellers who have watched their cars sit for a month are more open to a sensible offer than at any point since 2019. The one exception is if you are trading in as well as buying, because a softer market softens your trade-in too.

Our advice is unchanged regardless of the cycle: buy the car with the best documented history you can afford, pay for an independent inspection, and run a PPSR check before handing over money. Market conditions decide what you pay this month; service history decides what the car costs you over the next five years. The second number is almost always bigger.