Market Trends of Australia Used Car Financing Industry
This section covers the major market trends shaping the Australia Used Car Financing Market according to our research experts:
OEM Based Financing Gaining Momentum
Any car that has been prior owned and is now being resold through a private seller, classified ads, or local dealers without undergoing a thorough vehicle inspection test by experts is considered a used car. On the other hand, a certified pre-owned (CPO) car vehicle has previously been extensively inspected (pre-purchase inspection) and reconditioned properly to perfection by professionals.
In Australia, changing consumer preferences and ease of owning a pre-owned car at a much more affordable price have provided significant traction to the market. Australia is an emerging economy with lowered GDP growth rate, people have low purchasing power. Used car financing helps people to own a personal car at the much-lowered price at affordable EMI instalments. This reduces the burden of one-time payments just with a 30% initial down payment.
Moreover, the OEM are seen offering wider pool of used car under their fleet and offers better interest rates compared to other. In addition, the trust factors which has come out with increased fraud cases globally has resulted in gaining traction among OEM used financing where consumer feels save to get the car financed from OEM itself.
Under OEM financing, key automakers in Australia who are offering the pre-owned car fleet also offer chances of getting the vehicle financed based on a certain time period and rate of interest regulation by country's nationalized banks.
Considering these prominent factors for OEM used car landscape in Australia, demand for used car based on OEM financing is expected to witness moderate growth rate during the forecast period.
Hatchback Segment To Gain Traction
Owing to the affordability of hatchbacks, the sales of this segment of the used car market were least disrupted during the global pandemic. Hence a little over 50% of the car buyers in the country may opt for a user over a new vehicle.
Hatchbacks are popular for a variety of reasons, including lower taxation than sedans while providing the same performance and comfort. Furthermore, because there are so few new models that qualify for these tax breaks, the price of used hatchbacks remains unaffected.
When it comes to secondhand hatchbacks, these vehicles are an appealing alternative to sedans and SUVs which makes the overall pricing at a higher level. One may get hatchbacks in decent shape that are 5 to 10 years old on the market.
With changing consumer preferences in terms of fuel economy, cost, and overall maintenance benefits, demand has been witnessing immense growth for the adoption of the used hatchback. today a diverse range of hatchbacks are on the market, ranging from Japanese to South Korean to American models making consumers first choice in the Australia.
Moreover, due to the increased digitization and the ability of the companies to provide immersive purchase experiences remotely, the used car market is expected to witness significant growth. Furthermore, the rise in the value-added service offering and the variety of finance providers offering credit for used cars will also contribute to the growth of the hatchback segmet in Australia used car market in the region.
