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Drivers to steer clear of beloved 4WDs amid financial strain

  • SUVs and four-wheel-drives accounted for the lion’s share of all new vehicles sold in Australia in 2021.
  • Rising fuel prices and interest rate hikes could force 4WD owners to sell their vehicles.
  • A total of 1,049,831 vehicles were sold across the country in 2021, a 14.5% increase from 2020.

Australia’s love for four-wheel-drives and SUVs has come to light with sales soaring to a record and accounting for the lion’s share of all new vehicles sold in the country in 2021.

However, those who splashed out on 4WD and SUVs during the pandemic may be forced to sell up amid increasing interest rates and record-high fuel prices.

The Australian Automobile Association, which recently released its Affordability Index for 4Q21 found that in just one year, the average fuel expenditure in Perth alone increased by 38%, from $60.08 a week in 2020 to $82.75 at the end of 2021.

While Perth also breached the $2 per litre fuel mark last week for the first time, it also has the unfortunate title for the highest car loan payments in the country with drivers spending $171.49 a week on car loans.

The price of oil rose to above $US100 a barrel last week amid surging gas and coal prices due to potential supply disruptions as a result of the conflict in Ukraine.

Despite these costs, the Federal Chamber of Automotive Industries, which is the peak body for Australia’s auto industry, reported that in 2021 a total of 1,049,831 vehicles were sold across the country – a 14.5% increase on 2020.

Aussies’ preference for SUVs and light commercial vehicles continued throughout the year, with 531,700 SUVs sold – a 16.9% increase from 2020. Light commercials were up 23.2%, while passenger vehicle sales decreased 0.2% on last year’s figures.

Drive.com.au has reported that in 2021 Australians treated themselves to the record number of four-wheel-drive wagons, as more people looked to holiday at home while international travel restrictions were in place due to the pandemic.

Unprecedented demand for both new and used vehicles during the pandemic has led to a chronic shortage, however that is expected to change when owners start to sell their vehicles under financial strain. That shortage also led to the cost of used cars soaring in value by about 35% during COVID-19.

Buyers who paid more for a second-hand 4WD could now sell at loss should the vehicle be resold amid higher costs, as people steer clear of paying exorbitant prices amid inflationary pressures.

According to Drive.com.au, Toyota was the highest selling 4WD brand for 2021, followed by Mazda, Hyundai, and then Ford.

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