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The Australian Automotive Dealer Association (AADA) has expressed disappointment at the ACT Government’s decision to further increase the cost of purchasing new vehicles, describing the latest changes to motor vehicle duty as another example of Canberra motorists being targeted to repair the Territory’s budget position.

Under measures announced in the 2026-27 ACT Budget, high rates of motor vehicle duty will apply to vehicles with higher emissions, adding to the cost of purchasing many new vehicles used by families, tradespeople, and small businesses.

AADA CEO James Voortman said the changes continue a worrying trend of the ACT Government repeatedly turning to motorists when it needs to raise revenue.

“For the second year in a row, the ACT Government has chosen to increase taxes and charges on people purchasing vehicles,” Mr Voortman said.

“Motorists are increasingly being treated as a convenient source of revenue to help address the Territory’s budget challenges. At a time when cost-of-living pressures remain significant, this is a disappointing outcome for consumers and businesses alike.”

Mr Voortman said the industry was particularly concerned by the lack of consultation prior to the announcement, despite the significant impact the changes will have on vehicle buyers and retailers.

“The ACT Government and Treasurer have not meaningfully engaged with the retail automotive industry before introducing these measures, despite dealers being responsible for administering the Territory’s motor vehicle duty system and helping consumers navigate these costs every day.”

Governments should focus on policies that encourage fleet renewal rather than making it more expensive for consumers to access newer technology.

“New vehicles are safer, cleaner and more fuel-efficient than the vehicles they replace. Public policy should be encouraging consumers to upgrade to newer vehicles, not creating additional barriers to doing so.”

“The ACT Government should work collaboratively with industry to achieve its environmental objectives while ensuring motorists and small businesses are not unfairly burdened by additional taxes and charges.”

While the AADA acknowledges the Government has delayed previously announced registration indexation, the Budget shows that registration charges will increase significantly over the forward estimates.

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Key Headlines

1. Recovering from the weakest month of the year in April, total sales rose to 221,323 in May, broadly in line with January and March.
2. Demand for electrified vehicles is building. Electrified vehicles accounted for approximately 16 per cent of all 1 to 5 year old used vehicle sales in May.
3. For the first time in 2026, more than half of all vehicles sold in May had their asking price reduced before the sale was made.
4. Average discounts reached their deepest level of the year at 3.4 per cent.

Market Snapshot

Australia’s used vehicle market bounced back in May following a seasonal slowdown in April, with sales returning to levels seen earlier in the year despite continued pressure on vehicle pricing.

New data from the Australian Automotive Dealer Association (AADA) and AutoGrab shows 221,323 used vehicles were sold during May, up from 203,525 in April. At the same time, buyers continued to benefit from increased choice and stronger negotiating power, with more than half of all used vehicles sold after a price reduction.

Discounting Reaches Highest Level of 2026

May marked the first month this year where more than half of all used vehicles sold had their asking price reduced before sale.

The average discount on vehicles that required a price reduction reached 3.4 per cent, the highest level recorded in 2026.

Petrol and diesel vehicles both exceeded the 50 per cent discount threshold, while hybrids remained the most pricing-resilient fuel type. Less than half of all hybrids sold required a discount, and those that did attracted the smallest average price reductions.

According to AutoGrab’s analysis, elevated vehicle supply following April’s softer trading conditions has increased competition among sellers and placed downward pressure on asking prices.

General Market Statistics

1. 221,323 vehicles sold in May, an 8.7 per cent increase on April.
2. 339,728 vehicles listed for sale in May, a slight decrease month on month.
3. Dealers accounted for 45.4 per cent of the sales for the month.
4. Average days to sell jumped out to 51.8 for May, the highest point for the year.

Reaction

“The increase in discounting reflects the strong level of competition in the used vehicle market at the moment. With plenty of stock available, buyers are in a good position to compare options and negotiate on price, while dealers continue to work hard to match vehicles with customers,” said AADA CEO James Voortman.

“It’s no surprise to see hybrids performing so strongly. With household budgets still under pressure, many consumers are looking for ways to reduce fuel costs, and hybrids offer a practical and proven solution,” he said.

“May’s rebound to 221,323 sales tells us April was a seasonal dip, not a change in underlying demand. Volumes came straight back to where they sat in January and March, which is exactly what we’d expect when buyers have stock to choose from and room to negotiate,” said AutoGrab Chief Operating Officer Saxon Odgers.

“The discounting we recorded in May is a competitive supply story. When more than half of all vehicles sell below their asking price and cars are taking 51.8 days to move, the market is telling sellers there are more cars on the ground.

“Hybrids held their price while petrol and diesel both passed the 50 per cent discount mark, and that resilience is now showing up month after month,” he said

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The Australian Automotive Dealer Association (AADA) welcomes the Albanese Government’s work to honour its election promise to legislate protections for franchised new car dealers by banning unfair trading practices.

James Voortman, CEO of the AADA, said that the release of today’s Treasury consultation paper is tangible progress and recognition that Australia’s franchised new car dealers need protection from the exploitation by multinational car manufacturers.

“Today’s consultation paper is a very important step to delivering important franchising protections for new car dealers,” said James Voortman, CEO of the AADA.

“For years, the AADA has been advocating for these reforms which are now even more pertinent in the biggest disruption our industry has seen. Today’s announcement is welcome but until this is legislated, Australian new car dealers will always be vulnerable to unfair behaviour that is not in their or consumer’s interests.”

Earlier this year Prime Minister Anthony Albanese stated in a speech to a room full of new car dealers that ‘…in order to protect consumers from unfair practices, we have to protect dealers as well’.

This statement from the Government clearly demonstrates their understanding of how protecting both Australian consumers and dealers are intrinsically linked.

Australia is facing challenging economic times with overall new vehicle sales declining. Dealers are operating in a very difficult environment with a record number of new manufacturers entering the market while the industry adjusts to decarbonisation of the transport sector. It is thus imperative that the Government legislates these protections so the over 64,000 people employed in the nearly 4,000 new car dealerships across Australia are shielded from the proven power imbalance within the automotive franchising sector.

The 2026 Dealernomics Automotive Statistics booklet is available for download here.

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The Australian Automotive Dealer Association (AADA) says the 2026-27 Federal Budget comes at a time of heightened global economic uncertainty, ongoing cost of living pressures and a rapidly changing automotive market.

With more than 3,900 new car dealerships employing over 64,000 Australians nationwide, the AADA said this year’s Federal Budget will play an important role in supporting confidence and investment in Australia’s new car market.

While the Budget took a measured and fiscally restrained approach, the AADA commends the continued support of Australian dealers. The AADA is pleased the government has adopted the recommendations from our 2026-27 Pre-Budget Submission to expand the scope of the DRIVEN program in order to better meet industry needs.

The AADA also welcomes the extension of the DRIVEN program by an additional year out to 2029, with AADA CEO James Voortman stating that “this extension recognises the critical role dealers play as the consumer touchpoint in the EV transition and supports dealers while they continue to invest heavily in facilities, workforce capability and infrastructure”.

The AADA supports the Government’s recently announced changes to the Electric Car Discount, describing the reforms as a sensible adjustment to ensure the policy remains sustainable and accessible to everyday Australians.

Mr Voortman said the changes struck an appropriate balance between supporting EV uptake and maintaining long-term budget sustainability. “As the only demand-side incentive currently available to encourage EV uptake, these changes provide greater certainty for consumers, dealers and the broader automotive sector.”

The AADA recognised the Government’s ongoing commitment to addressing the long-standing power imbalance between dealers and global vehicle manufacturers, through $9 million to support the implementation of unfair trading practices (UTP) and consumer guarantee and supplier indemnification reforms.

“The franchised new car retail sector continues to operate in an increasingly complex environment characterised by margin pressure, rising costs and rapid brand expansion, as such, it is critical the regulatory framework evolves to provide fair protections for local businesses and consumers,” he said.

This is a challenging period for Australian dealers who are managing the impacts of evolving regulatory settings, including the New Vehicle Efficiency Standard (NVES), requiring substantial private investment at a time when business conditions remain challenging and policy settings continue to evolve. The AADA said broader economic conditions, energy policy and confidence to invest in business would remain critical issues for the sector over the next 12 months.

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Key Headlines

1. Impacts of the Middle East conflict continues to influence buyer priorities. Heightened running cost considerations are pushing purchase decisions towards electrified vehicles.
2. Used hybrid vehicles are the standout performer in used electrified stock. Demand is strong, supply is tightening, and values are holding across all model years.
3. PHEV momentum is more uneven. The segment absorbed a fuel-driven demand surge in March, but stock velocity splits sharply by model and age.
4. Chinese PHEV brands have entered the used market in volume. Brand openness among buyers is growing, but it is not yet universal.

Market Snapshot – Hybrid and PHEV

Australians are increasingly moving to electrified vehicles as rising fuel prices and cost-of-living pressures reshape buying behaviour, according to new market intelligence data from AutoGrab and the Australian Automotive Dealer Association (AADA).

While much of the public conversation continues to focus on EVs, which experienced a sharp surge in March 2026, the shift towards lower running cost vehicles has not stopped at EVs. The economic case for electrified options has become hard to ignore and reframed how buyers think about BEVs, PHEVs and hybrid vehicles.

Hybrids Lead the Electrified Market

A total of 28,395 used hybrid vehicles were sold nationally between January and April 2026, representing 11.2 per cent of all used vehicle sales for 2021-2025 model year vehicles.

While EVs continue to dominate much of the public conversation around electrification, the data shows hybrids are a strong performing segment of the used electrified market, with buyers attracted to lower running costs without needing to change driving or charging habits.

Used hybrid supply tightened significantly during the first four months of the year, falling from 53.8 days supply in January to just 42.3 days in April – well below petrol and diesel vehicles, which both increased over the same period.

Toyota dominates the used hybrid market, with the Toyota RAV4 and Corolla accounting for eight of the top ten hybrid models by sales volume. Both vehicles recorded consistently strong selling times and tight stock levels, reinforcing Toyota’s position as the benchmark brand in Australia’s used hybrid market.

The analysis also found hybrid retained values remained exceptionally strong, with 2025 model year vehicles averaging more than 100 per cent retained value across the reporting period. Even 2021 model year hybrids retained an average 88.2 per cent of original purchase price.

PHEVs Gain Momentum as BYD Emerges

Used plug-in hybrid vehicle (PHEV) sales also strengthened during the period, with 7,536 vehicles sold nationally year-to-date, representing 3.0 per cent of used vehicle sales.

The segment experienced a sharp uplift in March as fuel prices surged, although demand varied significantly by brand and model.

Chinese brands are beginning to establish themselves in the used PHEV market, led by BYD. The 2025 BYD Shark 6 recorded just 18.5 days’ supply, the fastest-moving PHEV in the segment, highlighting particularly strong buyer demand.

However, the data shows the broader PHEV market remains uneven, with newer models performing strongly while older stock experience softer retained values and slower selling times.

General Market Statistics

• The broader used vehicle market also remained active in April, with 343,021 vehicles listed for sale nationally, representing a 4.7 per cent increase month-on-month.
• A total of 203,525 vehicles were sold during the month, down 8.7 per cent compared to March.
• Dealer activity continued to account for a significant share of the market, representing 44.1 per cent of all used vehicle sales nationally.
• Market efficiency also improved slightly, with average days to sell falling to 44.6 days, indicating continued resilience in transaction times despite softer overall sales volumes.

Reaction

Australian Automotive Dealer Association CEO James Voortman said the data showed Australians were increasingly prioritising practicality and affordability when choosing their next vehicle.

“The fuel price spikes earlier this year clearly pushed many buyers toward electrified vehicles, particularly hybrids and plug-in hybrids.”

“While EVs attract much of the attention, this data is a reminder that hybrids are playing a major role in Australia’s transition, because they offer lower running costs without requiring major changes to driving habits or charging behaviour.”

“The retained value figures for hybrids are particularly remarkable and are one of the clearest indicators of genuine consumer demand we have seen in the used vehicle market.”

AutoGrab Chief Commercial Officer Saxon Odgers said heightened running cost considerations, in part precipitated by the Middle East conflict, has boosted the economic case for Australians to choose electrified transport as their next vehicle purchase.

“Used vehicle data in the Australian market points to a discernible shift towards electrified transport options, in a timeframe compressed by external factors and an increasingly dynamic marketplace.”

“Used hybrid supply tightened from 53.8 to 42.3 days between January and April, while petrol and diesel inventory moved in the opposite direction. That gap is a clear signal of where buyers are spending.”

For more detailed market analysis beyond the national snapshot, including state-level insights and additional market segmentation, visit AutoGrab AIR Pro for further information.

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The Australian Automotive Dealer Association (AADA) welcomes the Government’s announcement to adjust the Electric Car Discount ensuring it remains accessible to everyday Australians while substantially improving the Budget in challenging economic times.

With more than 3,900 new car dealerships nationwide, the AADA supports these changes to the Electric Car Discount to ensure that this demand side initiative is a sustainable policy setting which helps our members meet the current surge in demand for EVs.

“New car dealers are seeing unprecedented demand for EVs in Australia right now with current economic conditions motivating everyday Australians into low emission vehicles,” said AADA CEO James Voortman.

“As the only demand-side initiative from the Federal Government to incentivise the uptake of EVs, the reforms to the electric car discount are pragmatic changes that ensure the initiative can still be available to salary packaged employees,” he said.

As electric vehicles become mainstream it is essential that the Government turns its policy focus to the consequences of the transition. This includes greater investment in the electricity grid for installation of charging infrastructure, legislating franchising protections and protecting small businesses who need light commercial vehicles.

“Our members are under incredible pressure to meet the New Vehicle Efficiency Standard (NVES). Electric vehicles have not been, and are not, the top-selling vehicles. When the NVES policy settings are tightened, Australian new car dealers will need to be shielded to protect the more than 64,000 Australians they employ,” Mr Voortman said.

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The Australian Automotive Dealer Association (AADA) has used its 2026–27 Pre-Budget Submission to call for a series of targeted, low-cost reforms to improve efficiency and fairness, and support the transition to electric vehicles across Australia’s automotive retail sector in challenging economic times.

With more than 3,900 new car dealerships nationwide, the AADA says the upcoming Federal Budget presents a key opportunity to address regulatory bottlenecks and ensure policy settings reflect the realities of the retail automotive industry.

The AADA is calling on the Albanese Government to expedite commitments to reform franchising protections for Australia’s new car dealers. Australia’s franchising framework, with longstanding power imbalances between dealers and multinational manufacturers, is currently not appropriate to respond to the current pace of the transition to electric vehicles. With the introduction of many new brands in the Australian market, this poses many risks to businesses, consumers and the transition to low emission vehicles without proper protections in an open market such as Australia.

“Franchised dealers operate in a system where the balance of power is heavily weighted towards global manufacturers,” an AADA spokesperson said.

“Strengthening protections against unfair trading practices and extending unfair contract terms laws to all franchisees are critical steps to ensuring a fair and sustainable operating environment.”
The submission is also calling for an expansion of the Government’s Dealership and Repairer Initiative for Vehicle Electrification Nationally (DRIVEN) program to better support dealers on the frontline of Australia’s EV transition.

“Expanding this program presents an opportunity to better meet the demands of the surge in low emission vehicle purchases in recent months,” the spokesperson said.

“Dealers are the primary point of contact for consumers, and targeted investment in infrastructure, training and education at the dealership level will be critical to sustaining momentum in EV uptake.”

Another key priority is improving the operation of the Personal Property Securities Register (PPSR), where delays in removing finance encumbrances are creating unnecessary costs and holding up vehicle sales.

“Delays in clearing PPSR registrations are a daily frustration for dealers and consumers alike.”

“Our data shows 71 per cent of dealers using the system experience delays beyond the mandated five-day timeframe, which creates avoidable inefficiencies and slows down transactions.”

“This is a simple fix – ensuring timely removal of registrations and reviewing repeat search fees would deliver immediate productivity gains across the industry.”

“This is about getting the policy settings right and removing friction where it exists. The AADA believes the budget should be backing the businesses that are delivering for Australian consumers every day.”

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Key Headlines

1. Australia’s used electric vehicle market experienced a sharp and sudden surge in activity during March 2026, coinciding directly with the escalation of the Middle East conflict and the resulting spike in domestic fuel prices.
2. Used EV sales more than doubled between February and March 2026, rising from 3,176 to 7,557 units nationally. At the same time, available stock dropped by 38%, leaving the market with just 28.6 days of supply at the current rate of sales.
3. Chinese origin and value positioned EVs dominate consumer demand.
4. Used EVs prices have increased since January but the recovery is uneven.

Market Snapshot – What the Numbers Say

Australia’s used electric vehicle (EV) market experienced a sharp surge in March, with activity accelerating rapidly as fuel prices climbed following escalating tensions in the Middle East.

Used EV sales more than doubled month-on-month, jumping from 3,176 units in February to 7,557 in March, in one of the most significant shifts seen in the segment to date.

At the same time, supply tightened dramatically. Available stock fell by 38%, leaving the market with just 28.6 days of supply – well below the 60–90-day range typically considered balanced – and signaling a clear shift toward a seller’s market.

The surge has been led by value-oriented and Chinese-origin EV models, alongside strong dealer representation across the top-selling vehicles, reinforcing the role of competitively priced offerings in driving adoption.

While prices had softened through late 2025, residual values have begun to stabilise and recover since January, suggesting the recent lift in demand is starting to flow through to pricing—although conditions remain uneven across different model years.

The sustainability of this surge will depend on how long fuel prices remain elevated, but the March data points to a clear shift in buyer behaviour toward lower running-cost vehicles.

General Market Statistics

The broader used vehicle market also showed solid figures in March, with 327,762 vehicles listed for sale, marking a 1.9% increase month-on-month.

A total of 222,810 vehicles were sold, representing a 4.2% rise compared to February, signalling continued resilience in consumer demand.

Dealer activity remained a key component of the market, accounting for 45.22% of all sales, reinforcing the important role dealers play in connecting buyers with vehicles. Market efficiency improved slightly over the month, with the average days to sell falling to 45.6 days, down from 46.6 in February, indicating a modest acceleration in transaction times.

“Rising fuel prices are clearly influencing consumer behaviour, with more Australians turning to used EVs as a practical and cost-effective alternative,” said AADA CEO James Voortman.

“At the same time, the broader used vehicle market remains resilient, with steady sales growth and improving turnaround times indicating healthy underlying demand.”

“Dealers have consistently demonstrated their ability to adapt to changing market conditions, and the growing presence of EVs being offered by dealers in the used market is another example of that evolution in action,” said Mr Voortman.

“The Australian automotive market can change almost overnight. As we’ve seen recently, macro events whether an interest rate decision, a tariff announcement, an oil crisis, or a shift in consumer confidence – can ripple through the used car and demonstrator market within weeks, reshaping which segments are moving, which are stalling, and where the value sits, “said AutoGrab Chief Commercial Officer Saxon Odgers.

“What we saw in March wasn’t a gradual shift. Used EV sales more than doubled in the space of a month while available stock fell by 38%, compressing days of supply to under 29 days. For dealers who are well-positioned with the right stock, the opportunity is significant.”

“Residual values on used EVs have been stabilising since January, and the March demand surge is now adding upward pressure. Whether this marks a lasting inflection point will depend on how long fuel prices stay elevated, but the data is clear: cost of ownership is now front of mind for buyers, and that’s reshaping how they think about their next vehicle.”

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The Australian Automotive Dealer Association (AADA) says March 2026 new vehicle sales data highlights a clear shift in consumer preferences, with rising fuel prices accelerating demand for electric vehicles.

New vehicle sales totalled 108,703 vehicles in March, representing a decrease of 2.61 per cent compared to February 2026 and 1.81 per cent decrease YTD compared to the same period in 2025.

Battery Electric Vehicle sales reached 15,839 units in March, up 42 per cent month-on-month and 92 per cent year-on-year, accounting for 12 per cent of total new vehicle sales so far this year.

Plug-in Hybrid Electric Vehicle sales reached 8,215 units in March, up 40 per cent month-on-month and 40 per cent year-on-year, accounting for 7 per cent of total new vehicle sales for 2026.

Additionally, China’s market share continues to increase, and Australia is now a leading market for the Chinese automotive industry.

“The AADA is seeing a clear shift in consumer preferences this month, with many buyers who may have previously been on the fence now choosing to buy an electric vehicle,” said James Voortman, CEO of the AADA.

“Rising fuel prices have brought forward decisions for a lot of consumers, particularly those weighing up the long-term running costs of their next vehicle.”

“The key question now is whether this is the beginning of a more sustained shift in the market, something we will only know in the coming months.”

“What this month’s sales figures prove is that it will be Australian consumers that dictate the pace of the transition.”

“It is now more important than ever to purchase a vehicle from an authorised new car dealer given the large number of automotive brands selling new cars in Australia, and the wide range of vehicles available for sale with state-of-the-art technology.”

“Dealers have been embedded in their local communities for decades, helping Australians find the vehicle that best suits their individual needs. They are also there to ensure these cars are safely maintained and that warranty, consumer law and recall obligations are upheld.”

*The AADA has reviewed year-to-date VFACTS and EVC data, ranking vehicles by volume, and continues to analyse new vehicle sales by state, fuel type and market segments to monitor trends shaping the Australian market.

VIEW MARCH 2026 FIGURES

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The Australian Automotive Dealer Association (AADA) has welcomed elements of the newly announced Free Trade Agreement (FTA) between Australia and the European Union (EU), but says the deal stops short of delivering meaningful reform to the Luxury Car Tax (LCT).

The agreement includes changes impacting Australia’s franchised new car dealers, including the removal of the 5 per cent Passenger Vehicle Tariff (PVT) on vehicles imported from the EU and the introduction of a new LCT category for zero emission vehicles with a threshold of $120,000.

“The removal of the 5 per cent tariff on EU-sourced vehicles will improve affordability and increase competition in the Australian market,” said AADA CEO James Voortman.

However, Mr Voortman said the Government had missed an opportunity to undertake broader and more impactful reform of the LCT.

“While the introduction of a higher LCT threshold for electric vehicles provides some benefit, it is a narrow change that will only affect less than 1 per cent of vehicles sold and does not address the fundamental flaws of the tax,” he said.

“The LCT is a legacy policy from a time when Australia had a domestic manufacturing industry. Today, it acts as a distortionary tax that no longer reflects the realities of the modern automotive market.”

“This was a clear opportunity for the Government to implement meaningful reform by either abolishing the tax entirely or ensuring it only applies to genuinely luxury vehicles,” Mr Voortman said.

“Instead, we’ve seen a partial measure that leaves many everyday vehicles, including those commonly used by small businesses and regular Australians, still captured by the tax.”

The AADA reaffirmed its commitment to continued engagement with Government on comprehensive LCT reform.

“We will continue to advocate for a fairer system, one that targets true luxury vehicles, removes the taxes on genuine parts, and provides clarity and certainty for dealers and consumers,” Mr Voortman said.

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