Australia’s used car market recorded another month of growth in October, but a sharp increase in demonstrator and near-new vehicle stock is putting pressure on dealers already facing declining resale values.

New figures from the Australian Automotive Dealer Association (AADA) and AutoGrab show 261,166 used vehicles changed hands during October, up 1.2 per cent on September and marking the fourth consecutive monthly increase.

However, the number of vehicles advertised for sale climbed 5.5 per cent to 411,479, with much of the sales growth coming from private sellers and older vehicles.

Volkswagen cars in parking lot
1

Dealers accounted for 42.4 per cent of used vehicle transactions, while the average time taken to sell a vehicle fell to 42.6 days.

The figures reveal a growing imbalance between supply and demand for demonstrator and near-new vehicles.

Dealer listings of vehicles up to two years old increased 12.1 per cent between July and October, reaching 73,708.

Demonstrator vehicles alone accounted for 57,262 listings, representing 3.1 months of supply at current sales rates, compared with 1.6 months across the wider used vehicle market.

Electric vehicles are contributing significantly to the stock build-up, with dealers holding 9,656 demonstrator and near-new EVs in October, a 68.8 per cent increase since July.

Although used EV sales rose 14 per cent to 6,175 vehicles during October, listings grew faster than sales. Dealers accounted for 78.9 per cent of used EV transactions, with their sales increasing 19.4 per cent.

Meanwhile, vehicle resale values continued to weaken, declining across 16 of the 18 market categories monitored by AutoGrab.

The average retained value of a 2025-model SUV dropped from 89.9 to 87.8 per cent of its original retail price in October, equivalent to approximately $1050 on a $50,000 vehicle.

AADA Deputy CEO Brian Savage said increasing competition, ambitious sales targets and rising operating costs were adding to the difficulties facing dealerships.

“These figures highlight why headline new vehicle sales numbers don’t necessarily tell the full story,” he said.

AutoGrab Chief Commercial Officer Saxon Odgers warned that dealers risked further losses by holding onto demonstrators rather than adjusting prices to reflect market conditions.