Every month without fail, and over many years, I’ve received from the Department of Transport and Main Roads (TMR) the used vehicle transfers comparisons – dealer-to-private and private-to-private and, each month, I’ve run an eye over the data for the trend. In recent months, I’ve been taking a closer interest, noting the consistent incremental growth in private-to-private transfers and the corresponding decline in dealer-to-private transfers. In addition, I keep a watch on new vehicle sales.
Undoubtedly, 2020 – the year of global COVID-19 pandemic lockdowns and recovery – was the boom year for used car transfers. In all, there were 409,975 transfers – that is both private-to-private and dealer-to-private transfers – in Queensland. To put a perspective on that number, 195,769 new vehicles were purchased that year (down 13.7 per cent from the previous twelve months and the lowest tally in seventeen years – since 2003.) New car sales bounced from October / November 2020 and the Federated Chamber of Automotive Industries VFacts data for Queensland show March transactions of 21,588 – a 32.7 per sales growth compared to same time the previous year. But that is only half the picture; the orders from manufacturers are slow. As said in a previous Viewpoint, during the COVID-19 lockdowns, manufacturers misjudged consumer demand, and curtailed production enabling makers of semiconductors for electronic chips to shift production lines for other purposes such as laptops, play stations, computers, webcams, tablets and 5G smartphones. This phenomenon has been dubbed ‘chipageddon’, the consequence being dealers are unable to fill orders and leading to the demand for used cars.
Private-to-private used car transfers spiked in 2020, peaking at 61 per cent, up some 19 per cent on the previous year. Whilst a dramatic increase, the long-term trend since 2004 has been for private-to-dealer transfers to diminish with a consequential increase in private-to-private transfers. The evenness of transfers between the two sectors was shattered at the time of the 2007 -2009 Global Financial Crisis (GFC). Then, in 2008, private-to-private transfers predominated with 50.1 per cent of the transactions. Prior to the GFC, dealer-to-private transfers prevailed although declining since 2004 when records commenced.
The steady increase in private-to-private transfers corresponds with the prevalence of digital technology for commercial use by consumers and ongoing used car policy reforms by governments. Across the years, we’ve listened to our Automotive Remarketing Division (ARD) about used car market issues and policies to inspire consumer confidence whether it be a dealer-to-private or private-to-private transfer. In turn, we’ve represented their concerns to TMR and engaged with departmental officers on key policy reforms.
Engaging with Department of Transport and Main Roads (TMR)
In fact, we recently met with TMR officers with the aim of rescheduling the engagement agenda particularly now that some normality is occurring as the recovery from COVID-19 gathers pace. We have policy issues that we want to pursue, and the Department is working with stakeholders, including the Association, considering a range of used car measures. One of these is the review of the vehicle inspection guidelines and the safety certificate required if the vehicle is to be sold. The review aims to better align vehicle inspection guidelines with the new electronic, technical and safety features in late model vehicles. In this process, we want to raise issues relating to the inspection of ‘aging’ vehicles; a requirement for odometer reporting at each registration renewal; and odometer tampering. These issues have been raised with us by both our ARD members and consumers.
We have two far-reaching policies included in our recent submission to the Inquiry into Vehicle Safety, Standards and Technology, including Engine Immobiliser Technology. The first has relevance to the pre-sale -certification scheme. Integral to it should be a ‘title’ – similar to a ‘property title’ – being formally attached to the vehicle and a requirement to produce the ‘title’ at point-of-sale to the next owner of the vehicle. The intention of the suggestion is to reduce fraud and improve consumer safety and would need to be considered nationally. The second relates to providers and their issuance of safety certificates. Vehicle safety technological advancements will continue into the medium term at least. This means providers will need the competencies to assess these, which will require a more stringent training/accreditation and application approach than the safety technologies applying to aging vehicles.
A long-term and significant concern for us has been the unsafe written-off vehicles being returned to Queensland’s roads each year without any quality inspections of the repair work. Backyard repairers are exploiting a loophole which only requires a roadworthy certificate and vehicle Identity check to re-register a write off, creating potential death traps. Our position is that action should be taken to implement a ban on the re-registration of repairable write-offs, with all vehicles assessed as a total loss to be declared as statutory write-offs.
The controlled disposal of ‘total loss’ vehicles would eliminate a source of stolen/illegal parts and other related criminal activities.
We welcome the announcement by the Minister for TMR Mark Bailey that laws governing the repair standards for written-off vehicles (WOV) would be updated to reduce the number of unsafe vehicles on Queensland’s roads. The TMR recently completed a review of the WOV management which recommended the significant changes referred to by Minister Bailey. The Association was a part of the review process.
I take this opportunity, again, to remind members of our website program Dob-in-a-Backyarder. This reminder is timely, the Office of Fair Trading is monitoring backyard operators to detect illegal selling practices. Some 62 warning letters and 23 fines have been issued in the past seven months to operators in the motor industry. These included 16 warning and four fines related to unlicensed dealing.
Finally
In the words of the Australian Competition and Consumer Commission (ACCC): ‘as second-hand car sales increased during the pandemic, unfortunately so did vehicle scams. If current trends continue, Australians could lose much more to vehicle scams this year than the $1 million lost in 2020.’ In a vehicle scam, scammers post fake online listings offering to sell in-demand cars at well below market value to lure potential buyers looking for a second-hand vehicle. Scammers seek payment to secure the car for the buyer but never deliver the vehicle.
Vehicle scams are commonly hosted on sites such as Facebook Marketplace, Autotrader, Car Sales, Cars Guide and Gumtree. The ACCC drew attention to the new technique of scammers pretending to be defence personnel. In 97 per cent of reports it received this year, the scammer claimed to be in the military (navy, army and air force), or to work for the Department of Defence, and said they wanted to sell their vehicle before deployment. This sought to create a sense of urgency with buyers and explained the unusually low listing price of the vehicles and why buyers could not inspect them prior to payment.
In the words of the old proverb: ‘let the buyer beware’.
Until next month, take care and stay safe.
5 May 2021