Australians are paying record high prices for new motor vehicles amid severe stock shortages and strong demand – and a big change in the types of cars we are buying. Here’s the state-by-state rundown.

The average transaction price for new motor vehicles in Australia – how much people paid versus the advertised RRP – has hit a record high, exclusive data compiled by Drive has found.

While RRPs rose on average by 13 per cent over the past four years, drive-away prices rose by a staggering 23 per cent over the same period.

Analysis shows new-car buyers have been hit with the triple-whammy of rising RRPs, more expensive dealer-delivery fees, and a lack of discounts or drive-away deals from showrooms or vehicle manufacturers.

Severe stock shortages of new motor vehicles – caused by production slowdowns and high demand during the pandemic – pushed up the average transaction price from $35,200 10 years ago to $50,161 nationally last year, a staggering increase of 42.5 per cent over a decade.

In the past five years, the national average transaction price for new motor vehicles rose from $39,790, to $50,161 – an increase of 26 per cent, data compiled by Drive has found.

The figures are based on the final showroom prices paid for cars, SUVs, 4WDs and utes with factory-fitted options and dealer-fitted accessories – and exclude vans, buses and trucks.

Industry analysts say higher transaction prices for new cars have been driven by a combination rising RRPs, a shift to more expensive vehicle types such as SUVs, 4WDs, and utes – and the disappearance of discounts and drive-away deals amid rising demand and chronic stock shortages during the pandemic.

While new-car buyers are paying more than ever before, the ongoing stock shortages have delivered a massive financial windfall to dealerships. 

Last year, research firm Deloitte – which has forensically monitored the Australian automotive industry for 25 years – revealed new-car dealers made more money during the peak of the pandemic than ever before in recorded history.

Figures compiled by Deloitte show in the 2019 lead-up to the pandemic, new-car dealers on average made a profit of $600,000 a year – but in 2021 the average profit per dealer was $3 million.

Deloitte said the profit figures came from monthly reported data of 1650 dealers nationally – more than half the network of 3000 showrooms in Australia.

Data compiled by Drive – sourced from state and territory government departments – shows buyers in NSW, the most populous state in Australia, pay on average more for new cars than anyone else in the country.

The average transaction prices for new cars in NSW rose from $42,381 in 2018 to $54,451 in 2022 – an increase of 28.4 per cent over five years.

Despite the wealth in Western Australia, the nation’s biggest state by land mass had among the lowest new-car transaction prices in the country ($33,821 in 2018 to $44,822 in 2002 – an increase of 24.5 per cent). 

Industry analysts say Western Australian buyers prefer smaller and cheaper cars because they tend to travel vast distances by air within the state – or fly interstate for work.

The island state of Tasmania had the lowest average for new-car transaction prices in Australia (from $33,985 in 2018 to $42,450 in 2022, an increase of 24.9 per cent), in part due to a higher proportion of rental vehicles sold in the popular holiday destination.

More than 10 per cent of new cars sold in Tasmania last year were rental cars, compared to less than 5 per cent of the mix in most other states. 

The only Australian jurisdiction with a higher proportion of rental cars than Tasmania was the Northern Territory (13.8 per cent of all new cars reported as sold last year).

The average transaction prices compiled by Drive cover new cars, SUVs, 4WDs, and utes combined – and exclude trucks, vans, and buses.

Rather than track rising RRPs, analysis of transaction prices takes into account any discounts (or the lack thereof), increased dealer-delivery fees, as well as factory-fitted options and dealer-fitted accessories.

As the basis of stamp duty calculations, transaction prices accurately capture the final prices paid for new cars by private buyers, fleets, and novated lease holders.

Other key factors that have driven the increase in transaction prices for new cars: a dramatic reduction in the choice of cheap hatchbacks, and a shift to more expensive SUVs, 4WDs, and utes.

A high-ranking industry analyst – speaking on condition of anonymity – said transaction prices have risen as budget-conscious buyers pulled away from the new-car market and “Baby Boomers became an even bigger driving force.”

Baby Boomers – the demographic defined as people born after World War II, from 1946 to 1964 – are considered the most prosperous generation and are cashed-up having invested in property before the real estate boom.

“It’s particularly evident because we’re seeing a rise in people who are not necessarily replacing cars, they’re buying an additional car for their household. That’s at record levels,” the industry analyst told Drive.

“It’s not people going from one-car to two-car households, it’s people going from two-car to three-car households.”

Historically, about 75 per cent of new-car buyers in Australia are from a two-car household.

“The increase in two-car households going to three cars is (driven by) Baby Boomers,” the industry analyst told Drive.

“It’s not a teenager getting a new car. Most novice drivers buy used cars. The average age of new-car buyers hasn’t changed in more than a decade, it’s still around 51 or 52 years of age.

“It’s the over 50s – Baby Boomers – who are the driving these record high prices because they have the funds, even amid economic uncertainty. They’re a phenomenon.”

The analyst said there are more people over 60 years of age in Australia buying new cars than there are people aged under 30 buying new cars.

“Baby Boomers are largely unaffected by economic uncertainty,” the industry analyst told Drive. “They’re living off their superannuation and their investments, they’re fine. They’re not worried about rising interest rates because many of them don’t have a mortgage.”

The other telling sign Baby Boomers are behind the surge in prices: “Since 2019, rather than an increase in people financing cars as you might expect during COVID, we’ve seen a decrease in people financing cars.”

According to the latest data, about 50 per cent of new-car buyers finance their vehicle purchase while the other half pay cash. “And four out of five people who finance their vehicles never actually finish the contract. They pay it out early.”

Given the average age of new-car buyers is over 50, why do car companies aim to project a youthful image in their marketing campaigns?

“The (car companies) listen to their advertising agencies who are populated by young people who think they’re cool and know everything,” the industry analyst told Drive.

“Car companies are of the view that if they advertise to young people, they’ll attract older buyers anyway.

“But the reality is, they just don’t see the outside world. They live in a marketing bubble. Car company executives don’t dump money on a new car. Most of them don’t know what it feels like to desire a new car or get excited about a new car because they get a new company car every nine months, whether they want it or not.

“They’ve basically got a budget to spend on marketing and they spend it to keep their bosses happy and hopefully push some cars onto dealers who, eventually, will sell them to customers.

“That’s why you see a lot of nonsense in marketing and advertising in the auto industry. Australia has a very straight-shooting, price-driven culture when it comes to cars.

“The automotive brands that keep their proposition to customers simple, affordable, and transparent – and build reliable cars and honour warranty complaints when they arise – will win the day in the long run.”

Average new-car transaction prices: Australia

  • 2022 – $50,161
  • 2021 – $46,988
  • 2020 – $43,754
  • 2019 – $40,808
  • 2018 – $39,790

Average new-car transaction prices: NSW

  • 2022 – $54,451
  • 2021 – $50,684
  • 2020 – $46,794
  • 2019 – $43,788
  • 2018 – $42,381

Average new-car transaction prices: ACT

  • 2022 – $53,782
  • 2021 – $48,672
  • 2020 – $42,924
  • 2019 – $40,815
  • 2018 – $40,109

Average new-car transaction prices: Queensland

  • 2022 – $53,669
  • 2021 – $50,285
  • 2020 – $48,480
  • 2019 – $45,677
  • 2018 – $43,993

Average new-car transaction prices: Victoria

  • 2022 – $51,618
  • 2021 – $48,855
  • 2020 – $44,192
  • 2019 – $42,646
  • 2018 – $41,192

Average new-car transaction prices: South Australia

  • 2022 – $51,248
  • 2021 – $48,412
  • 2020 – $46,203
  • 2019 – $43,943
  • 2018 – $42,714

Average new-car transaction prices: Northern Territory

  • 2022 – $49,246
  • 2021 – $47,318
  • 2020 – $45,352
  • 2019 – $41,288
  • 2018 – $40,123

Average new-car transaction prices: Western Australia

  • 2022 – $44,822
  • 2021 – $42,233
  • 2020 – $37,000
  • 2019 – $35,842
  • 2018 – $33,821

Average new-car transaction prices: Tasmania

  • 2022 – $42,450
  • 2021 – $39,445
  • 2020 – $39,089
  • 2019 – $32,465
  • 2018 – $33,985

Source: State and Territory Governments. Average new-car transaction prices for cars, SUVs, 4WDs and utes (including any options and dealer-fitted accessories). Figures exclude trucks, vans and buses.

Joshua Dowling has been a motoring journalist for more than 20 years, spending most of that time working for The Sydney Morning Herald (as motoring editor and one of the early members of the Drive team) and News Corp Australia. He joined CarAdvice / Drive in 2018, and has been a World Car of the Year judge for more than 10 years.

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