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As businesses take delivery this year of new cars bought under the Government's business tax break which ended in December, a flood of trade-in vehicles is expected to hit the market, driving prices down. David Scognamiglio, boss of vedaauto.com which monitors automotive credit trends, said there would be an oversupply of traded-in business vehicles and "some great deals in the used-car market this year".
Vedaauto.com's Automotive Credit Demand Index for December showed credit for new vehicles rose 10 per cent compared with the previous December while used car credit dropped 7 per cent. While overall automotive credit demand rose a modest 0.9 per cent in December from the previous month, business vehicle credit applications increased 20.6 per cent.
The average business car loan amount also increased by $1462 from $43,471 in 2008 to $44,933 in 2009 with a spike of $46,111 across the final quarter, according to the data compiled from Veda credit applications and the National Vehicle Information System. AP Eagers Group state general manager Keith Thornton said the best buys were in utilities, vans and light commercial vehicles.
"Certainly there are a lot of used cars coming into the market so it's a fantastic time to be buying used," he said. "We noticed quite a spike in trades toward the end of the year so we have a lot of stock. There's a real mix of cars available, but obviously because of the incentive scheme we saw a lot of business buyers so there are more used commercial vehicles than normal."
Used car dealer Alex Salter said there would be "good buys" in the market, but not bargains. "We haven't seen a flood of good used cars hit the market yet. We anticipated it but we haven't seen it just yet," he said. "We are hoping that they will turn up but at the moment we are still paying a premium for good quality used cars."
Salter said the government's tax incentive meant new car dealers did not have to offer big prices for trade-ins to attract business last year, so prices should be competitive.
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