West Australians who splashed out on four-wheel drives and caravans during the pandemic may be forced to sell up amid rising interest rates and fuel prices, an auto industry expert says.

WA Motor Trade Association president Stephen Moir said while there was a chronic shortage of second-hand vehicles driven by closed borders and interrupted supply chains, that could change in the coming months as the cost of living increased.

“They’ve actually purchased those cars and caravans … because they haven’t been spending their money on overseas travel,” he said.

Stephen Moir says more second-hand vehicles will come onto the market in the second half of 2022.(ABC News: Andrew O’Connor)

Mr Moir said fuel prices would also contribute to financial strain.

“I watched somebody with a late model four-wheel drive … put $209 worth of petrol into his car,” he said.

“They could cost you 20 per cent more in fuel.”

Unprecedented demand for new and used vehicles during the pandemic has led to a shortage, but Mr Moir said that would change when owners started to sell up.

“I would expect that the second half of this year you will see an increase in the level of stock coming back into the marketplace,” he said.

But Mr Moir said buyers should not expect prices to drop significantly.

“We saw used cars go up in value by approximately 35 per cent during the pandemic — are they going to drop 35 per cent? I doubt it,” he said.

“I think the biggest thing will be that there will be greater choice for people.”

Travellers have swapped overseas travel for exploring the outback while WA’s borders have been closed.(ABC Kimberley: Erin Parke)

Backlog unlikely to ease

A backlog of orders for new vehicles has seen some customers wait more than a year for delivery and Mr Moir says there are no signs that will ease soon.

“Mainly because of things such as the disruption to manufacturing because of COVID, we’ve got a worldwide chip supply issue and now, with the Ukrainian crisis, that could put further pressure on parts of the supply chain,” he said.

Meanwhile, WA Four-Wheel Driving Club member Pat Jenkin said the reopening of WA’s borders would see people opting for overseas travel over outback adventures.

“With the COVID pandemic and not being able to go anywhere overseas and interstate … it’s just meant everybody had to do something and they decided four-wheel driving and camping and caravanning was the way to go,” he said.

“The second-hand market is where a lot of people go and I think there will just be an oversupply if everyone decides to go back to their pre-COVID life and holiday overseas rather than around Australia.”

He predicted buyers who had paid more for a second-hand 4WD during the pandemic may take a loss on the resale value if it meant they could afford to travel overseas.

“You don’t make money on cars normally, it’s a bit of a crazy world at the moment,” Mr Jenkin said.

Extracted in full from: Rising interest rates, fuel prices could force 4WD owners to sell up, expert says – ABC News