Your questions answered: When will car prices stabilise?

The prices of new cars have been tumbling for decades. Advances in manufacturing, materials technology and engineering, plus the shift of the manufacturing base to new nations entering the global market and offering low-cost labour, have all contributed to the cost-effective, democratised modern car.

In Australia, prices have also come down as governments have wound back import duties and other trade barriers. The introduction of the GST in 2000 also had some impact on pricing.

We’ve never had it so good... Until now.

For a variety of reasons, the global COVID-19 pandemic has ushered in a new era of rising car prices, for the first time in living memory. Basically, the reasons can be distilled down to supply and demand.

People are spending their savings on a new car rather than a new house, holiday or the like. The money that consumers had collected for that big overseas holiday is now disposable income…

If border closures restrict overseas holidays, why not buy a new car instead?

The problem with that thinking is that everyone else is thinking that too. More demand for cars in a supply-straitened period means higher prices as that’s what the market will bear.

Why should a salesperson or a dealer or a car company work hard for your business? Someone else will be along in five minutes to buy the same car you baulked at buying.

The big question on everyone’s mind is this: Will prices stabilise and will we see a return to business as usual for retail automotive consumers?

Question: Now that COVID has been sort-of sorted, what will happen to car prices? Will new-car and classic prices stabilise, or go down, considering the ridiculous prices people have been asking due to COVID? – Paul C

Answer: The escalation in new-car prices, with a knock-on effect on used values, is down to a global shortage. This will not end any time soon, as the whole world will be battling specific supplier-related issues and COVID-19 for quite a while into the future. As for classic prices, there are people who have more disposable cash because of COVID, but there are also plenty of speculators looking to turn a profit. So, values will stay high for some time to come.

Question:

Answer: The new Toyota LandCruiser will be a massive step up from any Ranger. It’s not a work truck trying to be a family car or a ute or an off-roader, or all three at once, but a big family beastie that is great for towing. If you can find the cash, it’s still a favourite.

Question:

Answer: If you love it then get it. It’s not best in class, but it’s a funky little car that has traditional Peugeot strengths in comfort and ride quality with a classy cabin.

Question: We have a 2012 Ford Falcon sedan running on gas, and we are looking to move to a SUV. Something suitable for travel, just the two of us. – David M

Answer: There are almost countless SUVs in showrooms, although many have waiting lists. For something affordable, up-to-date, good for touring and with similar space to your old Falcon, you should grab a test drive in the new Kia Sportage.

Question: My query is on the new Kia Sportage GT Line grade, but whether I should get a diesel or the petrol 1.6-litre turbo. Anything else to be mindful of when considering this car? I am currently driving a Mercedes-Benz C 250d sedan and would like as much fuel efficiency as possible without losing kick and power. – Voula

Answer: The new Sportage is a very classy SUV and the petrol turbo is the better engine choice, unless you’re doing lots of long trips. It’s a small engine but has surprising punch, with good fuel economy. Remember that there is a global trend away from diesel engines that will affect future resale values.

Question: I am looking to get the Kia Sportage GT Line but have discovered the auto park mode is only in the diesel, which seems ridiculous to me. So, are diesel engines different nowadays as to the running? I would be driving from Frankston South to Mordialloc and back each day but is that enough running for the engine. I know it used to be if you just run around the city, and turn the engine on and off often, it could damage the engine. – Selena B

Answer: The petrol engine in the latest Sportage is fine and will give you the economy and performance you want. Modern diesels are nowhere near as touchy as they were in the past but are getting a bad reputation with some people because the latest diesel particulate filter (DPF) systems can clog with too much short-trip driving.

Question: I currently have a 2004 Toyota LandCruiser Prado Grande, which has been fantastic. My problem is that the paintwork is breaking down, and the timing chain is just hanging in there. I am trying to decide what to purchase as our main car and to tow our 1500kg caravan. I am looking at the Prado Grande diesel again or the Nissan Pathfinder, perhaps the Volkswagen Touareg or Jeep Grand Cherokee as they are cheaper used. – John C

Answer: The Prado is still an excellent beast, and definitely the first pick. The Jeep got a bad reputation through poor aftersales support in Australia but the actual vehicle is quite good and would work for you.

Question: I would like your advice on buying a new small SUV. We have been looking at Kia Seltos and Subaru XV. Would love to know your opinion on both. – Peter T

Answer: The Seltos wins. It’s a newer design, impressive to drive and good value. The XV is okay, but Subaru is now trading more on its reputation than the quality of its recent work. A back-to-back test drive should make it an easy choice for you.

Question:

Answer: For longer-distance driving the diesel will work but remember the extra cost and also the potential hit on resale with diesel engines losing favour around the world. On Genesis resale, the brand has changed massively in every way since the early G80, which appealed mainly to hire-car drivers, and residuals should improve as the range grows and more people realise they are very good vehicles.

Question:

Answer: The A6 Allroad will work better than an SUV for your kind of driving but still deliver the ability to tackle gravel roads for weekend getaways. The Q7 is a hulking beast so, unless you need lots of seats for kids and grandkids, the Allroad is the way to go.

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