LandCruisers are 'better than money in the bank' in the hot second-hand market, appraisers say. But the European badge is in the dump

Demand for some sectors of the used vehicle market has “fallen off a cliff”, according to a leading assessor, while demand for needs-based vehicles from “bubble hatches” to workhorse LandCruiser Toyota remains hot.

Key points:

• A vehicle auctioneer says practicality, not status, now drives buying decisions
• The golden age of ag contributed to a huge demand for farm equipment and tools, along with an instant asset write-off of $150,000
• LandCruiser in particular demands more used than new

The COVID-19 production and delivery delays have created unprecedented demand in the used vehicle market.

But auctioneer and appraiser Simon Cotter said with rising interest rates there is now a duality in the vehicle market, with demand for luxury vehicles falling while workhorse and budget options continue to sell at or even above retail prices.

Our sale last week was the first sale since the COVID outbreak where, with certain products, the lack of interest was very noticeable on the auction floor, he said.

“It’s become a very specific product.

“There is a complete lack of interest in prestigious European cars, your Audi and Mercedes.”

Mr Cotter said practicality, not status, now drives people’s buying decisions.

Small, utilitarian cars are selling well, while demand for luxury cars has fallen significantly. (provided)

“I think the vehicle status symbol has stopped and people buy vehicles based on their needs,” he said.

“Small cars, bubble hatches and so on, you’ve got students who need cars. Those kinds of cars are so powerful, we’ve almost hit below-the-hammer retail prices.

“But you can put up a European equivalent, a Volkswagen Polo for example, and you won’t get an offer.”

Still looking for profit

Mr Cotter spoke to the ABC last September about the explosion in LandCruiser’s value in particular and said again that the trend is not slowing down.

“If there are they have increased in value more,” he said.

“If you can have a warehouse full of LandCruiser it’s better than money in the bank. That’s the only way to describe it.”

A used LandCruiser is great value for money, regardless of age.(Provided: Simon Cotter)

“Let’s say we’re selling a 2022 GXL double cabin with a basic tray and no fruit, so no bullbars and stuff, and people are paying $115,000 – $120,000 to get them.

“Recommended retail is about $86,000 down the road.”

Mr Cotter said the golden time for many parts of the agricultural sector contributed to the demand for LandCruisers, along with the federal government’s $150,000 instant asset write-off.

“This is an extraordinary situation that we are in,” he said.

“The same goes for trucks. Kenworth has certain models [where there’s] two years of waiting.

“Basically, if you buy a new truck today, I feel confident that if you need to sell it tomorrow, you will profit from it.”

Long waits for new trucks during the main harvest drive prices up there.(ABC Alice Springs: Emma Haskin)

But Mr Cotter said it was an unsustainable trend that he predicted would end abruptly.

“It’s worrying. I can still remember as an auctioneer and appraiser in the 1990s with Keating’s ‘recession we have to go through’, we had a period of odd consumer demand and then it fell off a cliff,” he said.

“Nothing happened for six months, and then the floodgates opened and we were busy doing foreclosures and auctioning the house where the bank moved.

“It was a terrible period of time and I fear we will see a similar situation.”

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