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For the first time on record, some used cars are selling for a higher price than the cost to buy the same model new. How did this happen?
The COVID-19 pandemic is proving to be a good time to sell cars.
Demand for new cars is so strong there is no discounting at dealerships. In turn, that has led to rising prices for used cars.
The situation is best illustrated by the Toyota LandCruiser 300 Series. The popular Sahara a variant sells for $144,000 driveaway from a dealership.
The price on online used-car classified sites is up to a staggering $175,000, or more than $30,000 over the original price of the car.
Buyers are paying that premium in preference to waiting a forecast six months for a new one.
The Toyota RAV4 is similarly affected. The official driveaway price for a new RAV4 Cruiser all-wheel-drive hybrid is $53,833 in Victoria.
Buyers face a delay of up to nine months and many aren’t prepared to wait that long, which has seen prices of second-hand vehicles soar to an average of $61,000.
Volkswagen is also feeling the pressure. The Golf hatch and Tiguan SUV are its most popular models, and both have wait times of up to five or six months.
The scenario affects virtually all major carmakers, with the exception of the Chinese-built vehicles and Mazda.