High used car prices are stabilizing but unlikely to return to pre-pandemic levels soon, remaining elevated due to persistent new car supply issues, inflation, high demand, and economic shifts like EVs, with the market slowly normalizing as new car production catches up, but costs staying higher overall. Expect gradual cooling, not a crash, with prices settling above historical norms, influenced heavily by new vehicle affordability.
Yes, second-hand car prices in Australia have been steadily dropping from their pandemic peaks as new car supply improves, bringing more ex-lease and fleet vehicles onto the market, and with more used EVs entering the fray. While prices are normalizing and buyers have more choice and negotiating power, they remain higher than pre-pandemic levels, with declines varying by segment, notes www.carexpert.com.au and www.drive.com.au.
January is the best overall month to find a used car deal, with 55.6% more deals. July 4th ranks as the worst holiday to buy a used car, offering 22.4% fewer deals than average. June is the worst month for used car deals, with 22.8% fewer deals.
Generally speaking, the best time to purchase is at the end of the month, when dealers are keen to meet their sales targets. Also, shopping during the winter months or right after the release of the new model of the used car you're looking at, can offer better deals as inventory changes and prices drop.
If it's been around for six or seven years, there could be an all-new model coming, both of which mark good times to bargain hard on a soon-to-be-superseded model. On the other hand, the forthcoming model might have improvements or extra features, often without a price increase, so it might be the better deal.
Worst Times
This article posits that there is a 20/4/7 rule, which is that you should plan to put 20% down, have your payments go no longer than four years, and the payment should not be more than 7% of your gross monthly income, or 15% of take-home pay.
Car dealership red flags include high-pressure tactics (focusing on monthly payment over total price), hidden or unnecessary fees (prep, market adjustments), refusal to provide VIN or history reports, mandatory add-ons (tint, paint protection), issues with the vehicle's condition (rust, bad paint, strange smells, missing service records), requiring a deposit for a test drive, and tactics that obscure the final price or rush your decision, all signaling potential overpricing or hidden problems.
A general rule of thumb for car mileage is that the average vehicle accrues about 10,000 to 12,000 miles per year. To determine if a used car has good mileage, divide the odometer reading by the car's age. For example, if you're looking at a 5-year-old car, a good mileage range would be between 50,000 and 60,000 miles.
December is widely regarded as one of the best times to purchase a car, new or used. As dealerships prepare for new inventory in January, they're often more motivated to discount existing stock. The competitive end-of-year atmosphere can work in your favor, helping you secure a better deal on a quality used vehicle.
The two peak seasons for auto sales typically occur in the spring and the fall. The fall surge in sales is partly due to U.S. auto manufacturers traditionally releasing new models for the upcoming year. After reaching their peak in November, vehicle sales usually decline sharply in January.
As the month draws to a close, salespeople may be more motivated to make deals in order to hit their quotas. The last few days of any month are an excellent time to visit the dealership if you're looking to negotiate a lower price or secure better financing terms.
January Comes After December
This is the top reason why January is the slowest month for car sales. It's not about the cold weather, but it all has something to do with the month before that – December. The last month of the year is the busiest, with the holiday season and many people go shopping.
Australia's "25-Year Rule" allows importing classic and collectible vehicles (cars, motorcycles, light commercials) older than 25 years, under the Road Vehicle Standards (RVS) laws, by obtaining a Concessional RAV (Register of Approved Vehicles) approval to avoid strict compliance with modern Australian Design Rules (ADRs). This "rolling" rule means the vehicle must be at least 25 years old at the time of application, simplifying imports for enthusiasts but still requiring compliance with ADRs relevant to its original build year, plus some modifications for safety like VINs or child restraints.
For under $25k, top new car choices often include the Kia Picanto/Rio, Suzuki Swift/Ignis, Hyundai Venue, and MG ZS/MG 5, offering great value with modern tech and safety, while used options open up reliable models like the Toyota Corolla, Mazda CX-3, and Mitsubishi ASX, alongside performance used cars like older Ford Mustang GTs for driving enthusiasts. The best choice depends on whether you prioritize new car warranty and features or more space/power in a used vehicle.
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Acceptable mileage on a used car
Reasonable mileage ranges from 15,000 to 20,000km per year. Anything beyond that is considered high mileage. So, a 5-year-old car with normal usage would typically have between 75,000 and 100,000km on the clock.
Ultimately, the decision to prioritize age or mileage depends on a variety of factors, including the car's intended use, budget and personal preferences. If reliability and safety are paramount, a newer car with moderate mileage might be the ideal choice.
Five Red Flags
A red car conveys more than just your potential driving habits. It also implies that you enjoy taking risks because you enjoy the rewards. Many people equate red cars with entrepreneurs, CEOs, and people who are highly competitive.
Higher Prices and Dealer Fees
Dealerships generally charge higher prices than private sellers. The added costs can include dealership fees, overhead, and any additional perks like warranties or inspections. You may end up paying more than the car's actual value.
The '20/4/10 rule' is a rule for buying a car you can follow where you make a 20% down payment, a 4-year loan tenure, and keep car expenses within 10% of your income.
Your $500,000 can give you about $20,000 each year using the 4% rule, and it could last over 30 years. The Bureau of Labor Statistics shows retirees spend around $54,000 yearly. Smart investments can make your savings last longer.