EV surge floods used market: petrol and diesel values slump as listings peak

Listings swell as EV converts offload combustion cars

Australia's second-hand car market has been flooded with petrol and diesel vehicles as record numbers of buyers switch to electric cars, and sellers are being forced to cut asking prices to move them on. Reporting by Elias Visontay and Talia Slonim in the Sydney Morning Herald and The Age, citing AutoGrab data covering dealerships and private listings, shows used car listings swelled to a peak of 437,855 in July, with about 98 per cent of those petrol, diesel or hybrid vehicles. The peak has since eased to 390,184 by September, with sales improving in the meantime. ¹

The electric shift is stark at the new-car end. The Sydney Morning Herald reports a record 157,958 new EVs sold in the first six months of this year, lifting market share from one in 10 new car purchases last year to more than one in four, with an EV sold roughly every 100 seconds in the first half. As those buyers trade in or privately sell their old vehicles, supply of combustion cars has surged: July listings included 12.2 per cent more petrol and 16.8 per cent more diesel vehicles than the same month a year earlier, according to AutoGrab data cited in the report. ¹

The trend flows through to used sales. In the six months to the end of June, sales of used petrol cars dropped just shy of 10 per cent and diesel by 4 per cent compared with the same period in 2025, the Sydney Morning Herald reports, while used EV sales soared 54.6 per cent to 25,417. ¹

Depreciation hits fuel-reliant cars at four times last year's pace

The value effect is dramatic. Petrol and diesel cars aged between one and five years depreciated by more than 8 per cent in just the eight months to September, according to AutoGrab data reported by the Sydney Morning Herald and The Age. That lost value is about four times the total depreciation the same vehicle types suffered across all of 2025. ¹²

"Nobody making a decision on a used car can rely on what it was worth last year," Ross Perry, chief revenue officer at AutoGrab, told the Sydney Morning Herald, describing the dilemma facing dealers, lenders and insurers. AADA chief executive James Voortman told the publication the Australian market is "undergoing the most significant transformation in its history", and that when waitlisted EV buyers got their new cars, FOMO-driven demand pushed them into the used market first. ¹

Discounting data backs up the pressure on sellers. Reporting by Neil Dowling in GoAutoNews Premium, drawing on the AADA-AutoGrab report, shows that in May, for the first time in 2026, more than half of all vehicles sold had their asking price reduced before sale, with average discounts at 3.4 per cent and cars taking 51.8 days to move. By June the share and size of discounting had widened further: the AADA and AutoGrab reported via the Australian Financial Market Association that more than half of one-to-five-year-old used vehicles sold below asking price, with the average discount reaching 3.7 per cent, the largest recorded so far this year, and petrol and diesel vehicles carrying the greatest discounting. ⁴⁷

Cheaper new EVs reset the second-hand maths

The Sydney Morning Herald attributes the shift to cheaper new electric models and soaring fuel costs. New entry-level EVs from Chinese brands such as BYD, Geely and MG sell for between $20,000 and $30,000 driveaway, and a typical driver can save about $3000 a year in running costs by avoiding the bowser, the report finds. A buyer with $30,000 who might once have considered a five-year-old European car can now purchase a new Chinese EV with modern features and a factory warranty for a similar price. ¹

"When consumers can buy a new EV for $25,000, the maths around the second-hand market starts shifting quite a lot," Bruce Billson, executive of the Motor Trades Association of Australia, told the Sydney Morning Herald. He also points to soaring repair costs for older cars, driven by parts shortages, more complex sensor componentry and manufacturers keeping maintenance within their own networks, as a factor pushing buyers towards new cheaper EVs instead of risking a second-hand car. ¹

The report also links the disruption to global fuel conditions, noting the Middle East war that closed the Strait of Hormuz disrupted fuel supplies and bolstered the appeal of EVs, both new and second-hand. AutoGrab chief executive Saxon Odgers earlier framed the same dynamic in the used market, telling AutoTalk that the Middle East conflict and rising running costs had accelerated interest in electrified transport in a timeframe compressed by external factors. ¹⁶

Hybrids and work vehicles buck the downturn; newer EVs hold firmer

Not everything fuel-related is losing value. As of September, the average 2020 hybrid had retained 81 per cent of its purchase value, according to AutoGrab data cited by the Sydney Morning Herald, against just 40 per cent for a 2020 EV. Utes, four-wheel drives, vans and vehicles that need to tow are also holding up better because they lack practical electric alternatives, AutoGrab's Perry told the publication. ¹

Hybrid strength is consistent across the year's reporting. The AADA-AutoGrab report, as covered by GoAutoNews Premium, described hybrids as the most pricing-resilient fuel type in May, with less than half of hybrids sold requiring a discount. AutoTalk reports that 28,395 used hybrids sold nationally in the first four months of 2026, that 2021 model-year hybrids retained an average 88.2 per cent of original purchase price, and that Toyota's RAV4 and Corolla dominated the segment. The same report noted the 2025 BYD Shark 6 was the fastest-moving used PHEV at 18.5 days' supply. ⁴⁶

Newer EVs are also defying their predecessors' reputation for steep depreciation. AutoGrab data shows that for 2024 builds, the depreciation differential against a same-year petrol model has narrowed to just 8 per cent, the Sydney Morning Herald reports. AADA's Voortman told the publication that when this year's EV buyers eventually dispose of their current vehicles, further listing spikes are likely, and the outlook across the entire second-hand market remains softer. ¹

Wholesale uncertainty and what happens next

The volatility extends to the wholesale market, which sources many of the roughly 2.3 million used cars bought in Australia each year. Ben Landau, chief executive of fleet marketplace Flipacar, told the Sydney Morning Herald that wholesalers are becoming reluctant to buy second-hand fuel-reliant vehicles, with some buyers who once purchased repairable cars now declining the risk of prices falling before they can resell. He described the combination of cheap EVs, high fuel prices and cost-of-living pressures as a "perfect storm", saying it is difficult to know how things will end up. ¹

Clearer pricing signals may emerge as the first wave of Chinese EVs bought through novated leases returns to the second-hand market over the next 12 to 24 months, the Sydney Morning Herald reports. In the meantime, Voortman says it is a buyer's market presenting good opportunities for used-car shoppers, a view the publication illustrates with the case of a Melbourne buyer who secured a 2013 Hyundai Accent with 50,000 kilometres for $12,500 at a dealership. ¹

The current softness is a reversal from both earlier in 2026 and the pandemic era. In March, reporting by Drive, cited by Dagens.com, showed used EV listings tightening from 3,535 to 2,387 and daily used EV sales more than doubling, with 2025-model EVs retaining nearly 88 per cent of value, as fuel-cost anxiety drove buyers towards electric. And the broader market has weakened overall: the AADA and AutoGrab reported just over 1.3 million used vehicles sold nationally in the first half of 2026, down 6.6 per cent on the same period in 2025, with June recording the largest year-on-year decline at 16.2 per cent, while used EVs and PHEVs kept growing and electrified vehicles accounted for 7.1 per cent of all used sales. ³⁷

The market has also shifted structurally over the past year. AutoGrab and the AADA's September 2025 insights report showed dealers accounted for 53.1 per cent of the 200,916 used vehicles sold that month, with the Ford Ranger and Toyota Hilux leading dealer sales, while newer EVs such as the Hyundai Ioniq 6 sat in dealer stock for 490 days on average, an early sign of the EV oversupply dynamics now reshaping pricing across the market. ⁵