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Dec 29 2009

Cars Used Car Prices


It is commonly stated that Used Car prices in Australia are much higher than in the UK.

This may vary depending on the type, and the age of the cars being compared.
Two examples are shown here, one being a recent (2007) car not very common in Australia, the other a common car and older (2001), in Australia.

Models between the two countries do vary a lot, and so it may be difficult to get exact comparisons, but there are some web sites that do provide a guide price for used cars, in both UK and Australia.

As an example, I have looked at the Estimated Valuations for the Ford Focus, one of the UK’s most popular cars.

Australia:

Ford Focus Zetec LS 5D Hatchback, 2007, 2.0 lt, 5 sp Manual

$13,680-16,720 private sale
$13,100-15,200 trade in
$19,500-23,400 dealer price

United Kingdom:

Ford Focus Hatchback, 2.0 Zetec 5d (Climate pack), 2007

£8,595 Franchised Dealer
£8,215 Independent Dealer
£7,760 Private Good
£6,290 Private Poor
£7,075 Part Exchange

Using the web links above you can check your own vehicles approximate values.

Looking carefully at the above example, I noticed that the Dealer trade in, or Part Exchange price, was very similar in each country if you use a Foreign Exchange rate of $2 to the £.

However the Dealer selling price shows a much higher profit margin in Australia.  This may explain why I have been able to get much bigger negotiated discounts when buying second hand cars here than I had expected. They have a bigger margin to play with ?

An example to illustrate the point using the above data:

UK:

The dealer buys in the  car at the part exchange price of £7,075 and sells it at £8,405 (the mid point of the franchised and independent dealers). This is a mark up of 18%.

Australia:

The dealer buys in the  car at the part exchange price of $14,150 (mid-point price) and sells it at $21,450 (mid-point price). This is a mark up of 51.5%.

The UK dealer could only give a maximum discount of about 12% before they are trimmed down to a 5% profit.
However, the Australian dealer, based on those figures, could give a 31% discount before they came down to that same 5% profit.

Now I wonder if the 20% discount, I negotiated for my last used car, was actually the best that I could have got after all.

The private sale mark ups, in comparison to trade in price, are closer than the dealer prices, but still larger in Australia than in the UK.

Now for an example of a popular car in Australia, the Hyundai Sonata:

Australia

Make: 2001 Hyundai  Sonata Sedan 6 cyl 2493cc Auto
Vehicle Pricing Estimate:
$5,830.00 to $11,840.00

UK

Hyundai Sonata 2001 2.7 V6 Auto
Original Price £17,499
Independent Dealer £750
Private Good £710
Private Poor £445
Part Exchange £535

This example shows a very big difference in used car pricing, for a more local vehicle.






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