Australia Used Car Market By Vendor (Organized, Unorganized), By Vehicle Type (Hatchback, Sedan, Sports Utility Vehicle (SUV), Multi-Purpose Vehicles (MPVs)), By Sales Channel (Online, Offline), By Region, Competition, Opportunities and Forecast, 2020-2030F

Market Overview:

Australia Used Car Market was valued at USD 71.64 Billion in 2024 and is expected to reach USD 128.37 Billion by 2030 with a CAGR of 10.21% during the forecast period. The Australia used car market is experiencing steady growth due to rising consumer awareness, cost-effectiveness, and increased vehicle ownership aspirations. Buyers are opting for used cars as an economical alternative to new vehicles, especially amid rising inflation and interest rates. The ease of financing options for second-hand vehicles is attracting a wider consumer base, including younger buyers and first-time car owners. Organized dealership networks and digital platforms have streamlined the used car buying process, improving trust and transparency in transactions. This shift from unorganized to organized retail has led to higher market penetration and better resale value assurance, encouraging repeat purchases and word-of-mouth promotion.

Several trends are influencing market dynamics, such as the emergence of certified pre-owned programs that offer quality assurance and limited warranties. Digital transformation is playing a central role, with AI-driven pricing, real-time inventory management, and online comparison tools helping customers make informed decisions. Leasing returns and end-of-life fleet vehicles entering the market have boosted supply, which is being efficiently managed through auction platforms and digital remarketing channels. Changing consumer preferences toward sustainability and reduced depreciation costs are pushing demand for reliable and fuel-efficient used vehicles. The growth of multi-brand dealers and subscription-based ownership models is reshaping how consumers approach car buying and ownership.

Despite promising opportunities, the market faces challenges such as inconsistent vehicle quality, lack of standardization in valuation, and fragmented after-sales service infrastructure. Buyers often encounter limited access to verified service history and worry about hidden repairs, which hinders trust in peer-to-peer transactions. Pricing transparency is another issue, especially in private sales where vehicle inspection processes vary. Regulatory uncertainty around emissions norms and roadworthiness standards adds complexity for both buyers and sellers. The competition from new car dealerships offering aggressive financing or trade-in deals can also slow down used car turnover, especially for older models. However, companies that invest in digital certification, extended warranties, and customer education are better positioned to overcome these hurdles and build long-term consumer confidence.

Market Drivers

Rising Cost of New Vehicles

As the price gap between new and used vehicles widens due to inflation, higher production costs, and advanced in-vehicle technologies, consumers are increasingly drawn to the used car market. New car prices are affected by the integration of premium features, stricter emission standards, and safety regulations, pushing affordability further out of reach for many consumers. In contrast, used cars offer a more economical choice without sacrificing essential features. Consumers seeking reliable transportation without long-term financial strain often find the used car segment more appealing. Moreover, depreciation in the first few years of a new car's life creates a sweet spot for budget-conscious buyers to pick nearly-new vehicles at significantly lower prices. The perception that used cars now offer more value per dollar is encouraging a shift in consumer behavior, making this a powerful driver in the market's expansion. For instance, Australian motorists are facing potential price increases in new vehicles due to the New Vehicle Efficiency Standard (NVES), effective from January 1, 2025. This initiative aims to reduce carbon emissions by setting annual CO₂ targets for car manufacturers. To comply, manufacturers might pass on costs to consumers, leading to price hikes. The Motor Trades Association of Australia (MTAA) estimates that prices for some vehicles could rise by over USD 9,000. For instance, Chevrolet models may see increases of USD 9,342, while luxury brands like Bentley and Lamborghini could experience hikes between USD 6,756 and USD 9,128. Mainstream brands such as Isuzu, Mazda, Subaru, Nissan, and Mitsubishi might implement price increases ranging from USD 3,875 to 4,575. Conversely, brands focusing on electric vehicles, like Tesla and Polestar, could benefit from the NVES by selling emissions credits, potentially leading to price reductions of up to USD 5,945. The MTAA indicates that 60% of the top 10 car brands will need to revamp their models to meet the 2025 and 2029 emission reduction targets.

Growing Popularity of Certified Pre-Owned Programs

Certified Pre-Owned (CPO) programs offer a bridge between the assurance of new cars and the affordability of used ones. These programs involve rigorous vehicle inspections, refurbishment, and extended warranties provided by manufacturers or authorized dealerships. CPO vehicles are often less than five years old, with low mileage and verifiable service histories, making them a more attractive and reliable option for cautious buyers. Consumers trust these programs due to the added layer of quality assurance and after-sales support. The peace of mind associated with CPO offerings has significantly improved consumer confidence in the used car segment. As these programs become more prevalent and widely promoted, they are playing a key role in changing perceptions and elevating the status of used cars in the automotive hierarchy. For instance, Australia’s used car market surged in May 2024, with listings rising 7.2% month-on-month to 296,542 vehicles and sales increasing 4.4% to 191,625 units. According to the Australian Automotive Dealer Association (AADA), every state and territory experienced listing growth, led by South Australia at 8.5% and Tasmania at 2.0%. Sales were also up across all regions, with Queensland and the ACT recording the highest monthly increases at 7.3%. The average time to sell a used car grew slightly to 45.5 days, up from 44.5. Retained values continued a gradual decline, with passenger cars holding at 84.1% for 2–4-year-old models and 69.8% for 5–7-year-old vehicles. Hybrid, EV, and PHEV sales rose 6.6%, 8.0%, and 16.6% respectively, despite used EV supply tightening. Private listings have increased amid declining dealer offerings, raising concerns over odometer fraud and online scams. Petrol and diesel still dominate the market, while the Ford Ranger nears the 6,000-unit monthly sales mark, maintaining its lead as Australia’s top-selling used vehicle.

Expansion of Online Used Car Platforms

Digital marketplaces have revolutionized the used car industry by offering wider inventory access, detailed vehicle listings, financing calculators, customer reviews, and vehicle history reports. These platforms empower consumers with transparency and comparison tools, reducing dependency on physical showrooms. Advanced search filters, virtual test drives, and online vehicle evaluations enhance buyer convenience and speed up decision-making. Buyers can now research and reserve vehicles remotely, schedule doorstep delivery, or test drive options without needing to visit multiple dealerships. This convenience-oriented ecosystem is drawing in digital-savvy consumers and reducing transaction friction, which in turn increases overall sales velocity. The scalable nature of these platforms continues to drive the structural transformation of the used car industry.

Rise in Short-Term Vehicle Ownership Trends

Changing mobility patterns, lifestyle preferences, and employment uncertainties are promoting short-term ownership models, which feed directly into the used car supply chain. Consumers are now more open to owning vehicles for only a few years before reselling or trading in, driven by evolving needs or a desire to upgrade. This has increased the flow of relatively new and well-maintained vehicles into the second-hand market. Leasing, corporate fleets, and subscription-based services are also contributing to this trend by releasing vehicles back into circulation after short usage periods. These vehicles often undergo regular maintenance and offer better residual value, making them attractive to second-hand buyers. This rapid cycle of ownership is increasing market liquidity and providing a consistent source of inventory for dealers.

Favorable Financing Options for Used Cars

The availability of tailored financing solutions has made used car ownership more accessible. Financial institutions and NBFCs are offering loans with competitive interest rates, longer repayment tenures, and quick disbursals even for pre-owned vehicles. The development of credit scoring tools specific to used vehicle loans has reduced lender risk, enabling broader borrower inclusion. This accessibility to credit has widened the potential buyer base, especially among young professionals and self-employed individuals. Lenders are also integrating with digital platforms to streamline pre-approval processes and provide EMI calculators for transparency. The presence of low down payments and bundled insurance services further boosts affordability. As financing becomes more efficient and customer-centric, it strengthens demand and brings formality to the used car ecosystem.

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Key Market Challenges

Inconsistent Vehicle Quality and Transparency

One of the significant barriers to growth in the used car market is the inconsistency in vehicle quality. Buyers often face difficulties in verifying the condition of a used car, especially in private sales. The absence of standardized inspection processes, inconsistent maintenance records, and unverified service histories increase the risk of purchasing a vehicle with hidden mechanical or cosmetic issues. This lack of transparency causes skepticism among potential buyers, leading to hesitation and reluctance in making quick purchase decisions. To address this, some dealers and platforms have implemented certified pre-owned programs and third-party inspections. However, these efforts are not universal, and the lack of uniform standards remains a challenge for the market’s overall development.

Legal and Regulatory Uncertainty

The used car market in Australia faces a complex regulatory environment with varying laws governing the buying and selling of second-hand vehicles. Emissions standards, safety inspections, and warranties can differ across states and territories, making it challenging for both dealers and buyers to navigate. Moreover, evolving regulations regarding vehicle safety features, airbag deployment, and emission control could affect how used cars are inspected, sold, and resold. Inconsistent enforcement of consumer protection laws, like the fair trading of used vehicles, further complicates the market. Keeping up with these regulatory changes can increase costs and administrative burdens for dealers, potentially slowing down transactions or leading to non-compliance.

Competition from New Car Dealerships

Used car dealers face intense competition from new car dealerships that offer attractive financing options, trade-in deals, and extended warranties on new vehicles. Many new car dealerships are actively expanding their pre-owned vehicle sections, benefiting from their established reputations and trust with customers. This creates a challenge for independent used car dealers who may struggle to match the promotional packages and financing terms offered by larger, well-funded new car outlets. The low prices for trade-in vehicles further complicate this competition as consumers prefer to switch to new models instead of opting for second-hand cars.

Limited Availability of Quality Inventory

The availability of high-quality used cars is a challenge in maintaining market demand. Vehicle turnover often relies on leasing returns, fleet vehicles, and trade-ins, but during economic downturns or low consumer confidence periods, these returns can significantly slow down. Without a consistent supply of well-maintained vehicles, dealers may struggle to meet customer expectations and demand. Moreover, the rapid pace at which newer car models are being released means that older models with desirable features may be harder to find, leading to an inventory imbalance. Dealers must carefully balance supply and demand, often requiring them to source vehicles from auctions, trade-ins, or other non-traditional means.

Negative Perceptions of Used Cars

The stigma surrounding used cars still exists, particularly regarding reliability and durability. Many consumers remain wary of buying pre-owned vehicles due to the belief that they will experience more frequent breakdowns or costly repairs. Despite improvements in the quality and condition of used cars, this perception persists, especially for older models. Buyers often fear hidden issues such as faulty transmissions, engine problems, or rust, making them more cautious about entering the market. Overcoming this negative perception requires more consumer education, transparency, and improved after-sales services.

Key Market Trends

Shift Toward Online Vehicle Transactions

The digital transformation of the used car market continues to evolve as more consumers and dealers embrace online platforms for buying, selling, and financing vehicles. Virtual showrooms, video consultations, and online auctions are enabling buyers to explore a wide variety of vehicles from the comfort of their homes. Platforms that allow users to filter vehicles based on their preferences, check service history reports, and negotiate prices without visiting multiple dealerships are growing in popularity. This shift is making the used car market more accessible to a broader audience and reducing friction in the buying process. Online sales are also making vehicle purchasing quicker and more convenient, with integrated logistics and home delivery options further enhancing the customer experience.

Rising Demand for Fuel-Efficient and Eco-Friendly Vehicles

As consumers become more eco-conscious, there is a growing trend toward the purchase of fuel-efficient or low-emission used vehicles. Hybrid and electric vehicles (EVs) in the used car market are seeing a rise in demand as buyers are more aware of environmental impacts and fuel costs. While the adoption of EVs is slower in the used car segment compared to new cars, it is gradually increasing, particularly among buyers seeking more sustainable and cost-effective alternatives. Additionally, vehicles with lower CO2 emissions and better fuel economy are becoming a significant selling point, especially as fuel prices fluctuate. This trend reflects the broader global shift towards sustainability and resource conservation.

Evolution of Vehicle Subscription Models

Subscription-based car ownership is gaining traction as an alternative to traditional ownership. Consumers are opting for flexible leasing or subscription plans that offer the ability to switch vehicles based on their changing needs. These models allow customers to drive different vehicles for a set period without the commitment of long-term ownership. As vehicle subscription models grow, they provide used car dealers with a steady stream of quality vehicles that can be resold or rotated through dealerships. The appeal of this model lies in its simplicity and adaptability, offering customers convenience while reducing the financial burden of owning a car outright.

Technological Advancements in Vehicle Management

Advancements in vehicle technology are not limited to new cars but are increasingly present in the used car market as well. Features such as advanced driver-assistance systems (ADAS), infotainment systems, and autonomous driving technologies are starting to appear in second-hand vehicles. With advancements in vehicle management technologies, consumers are becoming more interested in cars equipped with modern safety and tech features, even if the vehicle itself is pre-owned. Dealers who are able to integrate tech-focused tools such as predictive maintenance alerts, onboard diagnostics, and real-time vehicle health monitoring will have a competitive edge. The trend toward tech-savvy used vehicles allows dealers to cater to consumers looking for both modern features and cost savings.

Growth of Vehicle Leasing Returns

Leasing returns are a key driver for supplying high-quality used cars into the market. As businesses, fleets, and individual consumers increasingly choose to lease vehicles rather than buy them, a growing number of cars will enter the used car market after their lease periods end. These cars are often in great condition with low mileage, making them highly desirable to buyers. Leasing return programs, such as those run by major manufacturers, allow dealerships to access well-maintained vehicles that typically come with factory warranties and a complete service history. This trend ensures a continuous influx of desirable pre-owned vehicles that meet the needs of a wide range of buyers, providing a solid foundation for used car dealerships.

Segmental Insights

Vehicle Type Insights

In 2024, the Sports Utility Vehicle (SUV) segment was expected to dominate the Australian used car market. The growing popularity of SUVs stems from their versatility, spaciousness, and increased consumer preference for vehicles that provide both comfort and functionality. With families seeking more room and flexibility, SUVs are the preferred choice for daily commuting as well as longer trips. Their higher ground clearance, advanced safety features, and strong road presence appeal to a wide demographic, making them a practical option for both urban and rural settings. For instance, SUVs now dominate the Australian automotive landscape, accounting for over 55% of new car sales in 2023, a stark contrast to a decade ago when sedans and hatchbacks held the majority. The compact SUV segment, featuring models such as the Toyota RAV4 and Mazda CX-5, has surged in popularity, outselling most traditional car types. This trend reflects a broader global shift but is especially prominent in Australia, where vast distances and a culture of road trips make SUVs a practical and preferred choice for drivers across the country.

As Australians continue to value these practical advantages, the demand for used SUVs has surged. The segment is favored for its ability to offer the space of larger vehicles while still maintaining a relatively affordable price point compared to new SUVs. This price advantage, especially on used vehicles that have undergone a few years of depreciation, makes them a more attractive option for many buyers. In addition to the utility factor, the increasing integration of modern technology and safety features in used SUVs adds to their appeal, with many models now including advanced driver-assistance systems and infotainment options that are typically expected in newer cars.

While other vehicle types like hatchbacks and sedans maintain steady demand, the SUV's unique blend of practicality and style positions it as the most sought-after category in the used car market for 2024. The rising shift toward active lifestyles, where outdoor activities and travel are prioritized, has only increased this preference. Additionally, the increasing number of leasing returns and fleet vehicles in the market will contribute to the availability of high-quality used SUVs, ensuring they remain the dominant vehicle type throughout the year.

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Region Insights

In 2024, Victoria and Tasmania was expected to dominate the Australian used car market. This region’s strong economic performance, urbanization, and relatively high population density make it the largest market for used cars. Melbourne, the capital of Victoria, is a major hub for vehicle sales, with a large proportion of the state’s population relying on cars for both daily commuting and recreational activities. The demand for used cars in Victoria and Tasmania is also driven by a diverse consumer base, ranging from first-time car buyers to families seeking more affordable transportation options.

The state’s robust public transportation system, combined with increasing traffic congestion, has led many consumers to seek personal vehicles, with used cars being an attractive and cost-effective solution. The affordability of used vehicles, particularly after the initial depreciation period, has made them a more viable option compared to new cars, especially for those looking to avoid high purchase prices and long-term financial commitments. The region’s growing preference for SUVs and multi-purpose vehicles (MPVs) aligns with the increasing demand for more spacious and versatile cars that can cater to both city driving and rural excursions.

Melbourne’s role as a key distribution and sales center for used cars also contributes significantly to the region’s dominance. The accessibility to a wide range of dealerships and digital platforms in this area has improved consumer access to used cars, making it easier for people to find the right vehicle. The availability of quality used cars, backed by more organized sales channels and reliable after-sales services, has helped boost confidence among buyers in this region.

As Victoria and Tasmania continue to experience population growth, particularly in metropolitan and suburban areas, the demand for used cars is expected to rise, solidifying the region's position as the dominant player in the Australian used car market in 2024. The increasing reliance on personal vehicles, combined with a steady influx of used cars from various sources such as leasing returns and trade-ins, ensures that this region will maintain its leading role throughout the year.

Recent Developments

• In 2024, AutoSettle, a FinTech startup, has launched the world's first virtual settlement exchange for vehicle transactions in Australia. This platform aims to streamline the car-buying process by eliminating manual procedures, enhancing security through digital identity verification, and enabling real-time settlements. By integrating with automotive dealerships, financiers, marketplaces, and state registrars, AutoSettle addresses common issues such as fraud, inefficiencies, and delays, offering a more secure and efficient experience for buyers and sellers alike. ​
• In 2024, Uber Australia addressed the scarcity of affordable used electric vehicles (EVs) by partnering with Car Empire to import second-hand Nissan Leafs from Japan. These EVs will be offered to Uber drivers in Brisbane and the Gold Coast with financing options starting at approximately $124 per week. While EVs constitute 8.5% of new car sales in Australia, they represent only 0.6% of the used car market. This initiative aims to bridge that gap, facilitating a smoother transition for drivers to electric vehicles and supporting Uber's commitment to eliminating emissions across its platform by 2040.
• ​In 2023, Sojitz Corporation announced the full acquisition of Albert Automotive Holdings Pty Ltd (AAH), a leading pure-play operator in Australia's used car market. This strategic move enhances Sojitz's position in the wholesale and retail used vehicle sector, aligning with its broader automotive division objectives.

Key Market Players

• Global Cars Aus Pty
• HELLOCARS SUBSCRIPTION PTY LTD
• Carsguide Autotrader Media Solutions Pty Ltd
• Drive (Nine Entertainment Co. Pty Limited)
• Gumtree AU Pty Limited
• Carsales.com Limited
• Cartopia Pty Ltd
• Toyota Motor Corporation Australia Limited
• Pickles Auctions Pty Limited
• BMW Premium Certified

Report Scope:

In this report, the Australia Used Car Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

·         Australia Used Car Market, By Vendor:

o    Organized

o    Unorganized

·         Australia Used Car Market, By Vehicle Type:

o    Hatchback

o    Sedan

o    Sports Utility Vehicle (SUV)

o    Multi-Purpose Vehicles (MPVs)

·         Australia Used Car Market, By Sales Channel:

o    Online

o    Offline

·         Australia Used Car Market, By Region:

o    Victoria & Tasmania

o    Queensland

o    Western Australia

o    Northern Territory & Southern Australia

o    Australia Capital Territory & New South Wales

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in the Australia Used Car Market.

Available Customizations:

Australia Used Car Market report with the given market data, TechSci Research offers customizations according to the company’s specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).

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