Interstate flooding ramps up used car prices for young South Australians

Interstate flooding ramps up used car prices for young South Australians

Recent flooding in Queensland and New South Wales has created a shortage of used cars on the market, pushing prices above what young South Australians can afford. (Image: Royal Automobile Club of Queensland)

By Alana Pahor | @Alana_Pahor

Young people are facing a scarcity of used cars within their budgets as interstate floods exacerbate high prices.

Carsales.com.au content strategist Anthony Madaffari flagged the problem in April, just weeks after the rains ceased.

He said there is currently an “unprecedented” market shortage of cars under $20,000.

This poses a challenge for young South Australians who tend to have tighter budgets, according to those surveyed for this story.

Madaffari said the spike in used car prices corresponds to decreased supply and increased demand as people seek to replace cars that were damaged during the recent Queensland and New South Wales floods.

Insurance Council of Australia chief information officer Mark Campbell said its members have registered 19,892 personal motor claims following the floods, with 90 per cent of these cars deemed write-offs.

Adelaide Vehicle Centre sales consultant David Lennon said this car shortage is attracting interstate buyers into the southern market, increasing buyer competitiveness and ramping up prices in South Australia.

Madaffari said the price increase has forced young people to spend “a lot more money than they want to get into a first car” or ask their parents to financially contribute.

Half of the young people surveyed for this story said they would require financial assistance from parents or caregivers to afford a car.

Others are putting off purchasing a car altogether.

19-year-old tertiary student Harry Hutchison-Smith said he isn’t looking to buy: “Car prices are fairly expensive right now … so it seems like a bad investment”.

But for those who are, Lennon said the floods have created “a real buyer beware situation” as repurposed cars have found their way into the market.

He warned that dishonest sellers may take advantage of young buyers who are struggling to find cars within their budget.

“It’s more important now to do your research,” Lennon said.

“I would encourage everybody to do a Personal Property Securities Register search on your car … make sure it’s not written-off, stolen or flood damaged.”

Madaffari said he predicts prices will return to normal next year.

 “People [flood victims] will receive their brand-new cars and list their used cars for sale again,” he said.

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