Thousands of cars have been written off due to the extreme weather, prompting a warning from the Reserve Bank that prices for used cars could rise.
“We assume that the additional strain on resources, particularly in food, used cars, construction and maintenance materials, will increase quarterly inflation by about 0.3 percentage points in the March 2023 quarter, and an additional 0.3 percentage points in the June 2023 quarter,” the Reserve Bank said in its latest Monetary Policy Statement.
“These effects are assumed to be largely temporary.”
Turners Cars’ chief executive officer Greg Hedgepeth told RNZ’s Checkpoint the supply of used cars coming into the country had been down for quite some time.
“Over the last year, I think it’s going to be down approximately 30 per cent.”
Greg Hedgepeth, Photo / Norrie Montgomery, File
Hedgepeth said there were fewer used vehicles coming into the country now, and Turners anticipated up to 10,000 vehicles coming off the roads and being written off due to the recent weather events.
“There could be a short-term imbalance of supply and demand.”
Hedgepeth said statistics on insured vehicles and also some that weren’t showed roughly 10,000 cars that might need replacing coming out of Auckland and Napier.
He said they were still assessing the situation in Napier.
On whether there was enough stock to cover the replacement of those vehicles, Hedgepeth said there definitely was.
“At any given time, if you look at cars available for sale in the country it sort of hovers around that 70,000 mark.
Turners car auctions. Photo / Sarah Bicknell, File
“There is enough cars at any given time but what it might do though, is put some upward pricing pressure on those cars that are available as more people vie for the same cars.
In terms of price rises, Hedgepeth said it was difficult to tell but prices were holding up pretty high post-pandemic.
He said the Clean Car Discount Scheme implemented by the Government on April 1, 2022 and the Clean Car Standard has driven up prices in the used car space.
“Those have already elevated prices reasonably high and we are probably yet to see the full impact of the Clean Car Standard.
Hedgepeth said he anticipated that prices would remain high in the short term.
On which models would be in demand, he said people would probably want to replace a written-off car with a similar car.
