The Australian automotive landscape is going through one of its most significant transformations in decades, and nowhere is this more visible than in the used car market. After years of pandemic disruptions, supply shortages, and rising new car prices, Australians have increasingly turned to second-hand vehicles. Now, as 2025 begins, the used car sector is showing a mix of resilience, evolution, and new challenges that buyers and sellers alike need to understand.
This comprehensive guide breaks down the latest trends shaping the Australian used car market in 2025—from pricing patterns and buyer behaviour to the growing role of electric and hybrid cars, finance shifts, and evolving government policies.
The State of the Used Car Market in 2025
Over the last three years, Australia’s used car market has experienced unusual volatility. In 2021 and 2022, global supply chain shortages pushed second-hand car prices to record highs, with some vehicles selling for more than their new counterparts. By 2023 and 2024, the market began correcting, but inflation, rising interest rates, and ongoing supply issues kept prices elevated.
As of 2025, the market is stabilising, but not reverting to pre-pandemic levels. Instead, a “new normal” is emerging where used cars continue to command strong prices, particularly for certain models, but affordability pressures are reshaping buyer priorities.
Key observations include:
Stable but elevated prices: Overall used car values have cooled compared to peak pandemic levels, but they remain 20–30% higher than 2019 averages.
Shift toward efficiency: Rising fuel costs and climate awareness are driving demand for hybrids, EVs, and smaller petrol cars.
Financing challenges: Higher interest rates have made used car loans more expensive, forcing many buyers to stretch budgets or delay purchases.
Regional variations: Urban buyers are favouring compact SUVs and hybrids, while regional Australians continue to seek durable 4x4s and utes.
Why Used Cars Remain in Demand
Several factors explain why Australians continue to favour used cars in 2025:
Affordability pressure: With the average new car price in Australia now exceeding $50,000, many families and first-time buyers are priced out of the new market. A used car represents a more practical entry point.
Value retention: Australian consumers have recognised that late-model used cars (3–5 years old) offer a balance of modern features and reduced depreciation.
Supply bottlenecks: Although new car delivery times have improved, certain models still face months-long waitlists. Buyers unwilling to wait often turn to the used market.
Diverse choices: From fuel-efficient hatchbacks to rugged 4x4s and premium SUVs, the used car market offers greater variety across price ranges.
Pricing Trends in 2025
Pricing dynamics in the used car sector are complex in 2025. While some vehicles are holding their value strongly, others are facing sharper depreciation.
Holding Value Well:
Utes (Ford Ranger, Toyota HiLux): Demand from tradies and lifestyle buyers keeps resale strong.
Hybrid SUVs (Toyota RAV4 Hybrid, Kia Sportage Hybrid): Their efficiency and practicality make them hot commodities.
Compact SUVs (Mazda CX-5, Hyundai Tucson): These models balance size, comfort, and affordability.
Depreciating Faster:
Large petrol SUVs: As fuel prices rise, demand for thirsty seven-seaters is softening.
Entry-level EVs (first-generation models): Older EVs with shorter range and limited charging support are losing value quickly.
Luxury sedans: Prestige brands without hybrid/EV options are less in demand, pushing down prices.
The Growing Role of Electric and Hybrid Cars
One of the most significant shifts in the 2025 used car market is the increased presence of hybrid and electric vehicles (EVs).
Hybrids dominate demand: Models like the Toyota Prius, RAV4 Hybrid, and Corolla Hybrid are consistently sought after. Their proven technology and fuel efficiency make them appealing in both cities and regional areas.
EV supply rises: As early adopters trade in their EVs for newer models with longer ranges, more used EVs are entering the market. Brands like Tesla, BYD, Hyundai, and Nissan are now prominent in the second-hand sector.
Battery concerns: Buyers remain cautious about EV battery health and replacement costs. Warranties play a big role in resale value, with cars still under factory coverage commanding premiums.
Charging infrastructure: The growth of charging stations across Australia is improving buyer confidence, but regional areas still lag behind.
Buyer Behaviour Shifts
Australian buyers in 2025 are more cautious, research-driven, and financially stretched than in previous years. Key behavioural trends include:
Longer ownership cycles: Rising costs mean many buyers intend to hold onto cars for 7–10 years instead of upgrading every 3–5 years.
Increased online buying: Platforms such as Carsales, Gumtree Cars, and dealer websites are more popular than ever, with buyers using online valuation tools and digital inspections.
Safety and tech focus: Features like advanced driver-assist systems (ADAS), infotainment, and connectivity are high on buyer wish lists.
Regional vs city priorities: City drivers look for fuel efficiency and compact sizing, while regional buyers still prioritise durability, towing capacity, and off-road ability.
Financing and Insurance Challenges
The financial side of buying a used car is becoming more complex in 2025.
Higher loan rates: With interest rates still elevated, monthly repayments are stretching household budgets. Many buyers are opting for smaller loans or extending terms.
Insurance pressures: Comprehensive insurance premiums have risen due to higher repair costs and increased vehicle values. Cars with advanced technology (e.g., sensors, cameras) cost more to repair, inflating premiums.
Emerging subscription models: Some Australians are experimenting with car subscription services as an alternative to traditional ownership, particularly for EVs.
Regional and Demographic Differences
Australia’s vast geography means used car trends vary significantly between regions:
Urban centres (Sydney, Melbourne, Brisbane): Strong demand for compact SUVs, hybrids, and EVs due to congestion, parking, and fuel costs.
Regional towns: Utes, 4x4s, and diesel models remain in demand for durability and practicality.
Young buyers: Millennials and Gen Z prefer budget-friendly hatchbacks, hybrids, and entry-level EVs.
Older demographics: Baby boomers lean towards comfortable SUVs and vehicles with advanced safety features.
Technology and Features in Demand
Technology is a major driver in the 2025 used car market. Buyers expect more advanced features even in second-hand vehicles.
ADAS (Advanced Driver Assistance Systems): Lane keep assist, adaptive cruise control, and blind spot monitoring are highly valued.
Infotainment: Apple CarPlay, Android Auto, and large touchscreen displays have become baseline expectations.
Connectivity: Cars with software updates, built-in navigation, and smart integration are commanding stronger resale.
Interior comfort: Leather seating, premium sound systems, and flexible cargo layouts are sought after by families and long-distance travellers.
Challenges Facing the Used Car Market
Despite resilience, the market faces ongoing challenges in 2025:
Affordability crisis: Prices remain high relative to wages, making affordability a key issue.
EV battery uncertainties: Buyer hesitation around long-term EV ownership continues.
Grey imports: Influx of used imports (particularly EVs from Asia) raises questions about warranty, support, and compliance.
Environmental regulation: Policies encouraging EV adoption could reshape demand for petrol and diesel cars faster than expected.
Tips for Buyers in 2025
If you’re planning to buy a used car in Australia this year, keep these strategies in mind:
Do your research: Compare prices across online platforms and dealers.
Check warranties: Especially for EVs and hybrids, battery and drivetrain coverage is crucial.
Get inspections: Always seek independent mechanical inspections before purchase.
Factor in total costs: Beyond the sticker price, account for insurance, maintenance, and fuel/charging.
Negotiate smartly: Market conditions are more balanced than during the pandemic, giving buyers more room to negotiate.
Tips for Sellers in 2025
Sellers can also maximise returns by adapting to 2025’s market dynamics:
Highlight features: Tech, safety, and efficiency features increase appeal.
Maintain service history: A full logbook boosts buyer confidence.
Consider timing: Listing before major holiday periods often increases visibility.
Be transparent: Disclosing history (repairs, ownership) builds trust and can speed up sales.
Use online platforms: Expanding beyond local classifieds broadens your buyer pool.
Outlook for the Years Ahead
Looking beyond 2025, Australia’s used car market is expected to evolve further:
More EVs and hybrids: As new EV sales increase, the second-hand market will follow.
Better charging infrastructure: Confidence in EV ownership will strengthen in regional areas as charging expands.
Shift in depreciation: Vehicles with strong tech and safety packages will hold value better than basic models.
Affordability reforms: Government incentives or lending changes could reshape access to cars for lower-income Australians.
Final Thoughts
The Australian used car market in 2025 is defined by resilience, innovation, and shifting consumer priorities. While prices remain elevated, buyers now have more negotiating power and broader choices than during the height of supply shortages. The rise of hybrids and EVs, growing focus on technology, and evolving financial landscape are shaping a new era of used car ownership.
For Australians navigating this space, knowledge is key. Whether you’re buying your first second-hand hatchback, trading in for a hybrid SUV, or selling a trusty ute, understanding these trends will help you make smarter, more confident decisions in 2025.
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