Used Car Prices Are Falling in 2026 — But Your Finance Deal Could Cancel Out Every Dollar You Save

First, the good news: the used car market is genuinely cooling

Australia's used-vehicle market recorded its weakest sales figures of the first half of 2026, with buyers rewarded by greater choice, increased negotiating power, and falling prices. According to data from the Australian Automotive Dealer Association (AADA) and AutoGrab, 1,300,018 used vehicles were sold nationally in the first six months of 2026 — down 6.6 per cent compared with the same period in 2025. By June, sales were down 16.2 per cent on the same month in 2025, the largest monthly decline of the year. That is a serious softening. And it means buyers have leverage they haven't had since before COVID.

The numbers on the ground confirm it. By June 2026, more than half of all one-to-five-year-old vehicles were selling below their asking price, with the average discount widening to 3.7 per cent. On a $35,000 car, that's roughly $1,295 back in your pocket — before you've even started negotiating. Every state and territory recorded fewer used vehicle sales in the first half of 2026 than in the same period of 2025, which means this isn't a localised blip. It's a national buyer's market.

Utes like the HiLux, Ranger, and Mitsubishi Triton are seeing some of the steepest value falls in weekly market data. Passenger cars are softening broadly. Even ex-government fleet vehicles — which often represent good value buys — are being offloaded at larger-than-usual discounts. If you've been sitting on the fence waiting for the right time to buy a used car, mid-2026 is about as close to that moment as we've seen in years.

Now, the catch: ASIC just proved the finance industry will take it all back

In late June 2026, Australia's corporate regulator ASIC released Report 832 — Lifting the Bonnet: ASIC's Review of Car Loans — after examining more than 350,000 loans across eight car finance providers. What it found should make every Australian buyer nervous about walking into a dealership and saying yes to the finance offer on the desk.

The headline finding? Fees. Lots of them. Establishment fees at the lenders reviewed ranged from $299 to $995 — but that's before dealer fees are layered on top, and those are capped by nothing. ASIC highlighted one real Australian consumer, named Rex, who paid $9,154 in establishment fees on a $49,162 car loan. That is 18 per cent of the loan amount gone before he made a single repayment. Fees were often added to the loan principal too, meaning he then paid interest on those fees for the entire loan term. A bad finance deal doesn't just cost you money upfront — it compounds against you for years.

ASIC found that all eight lenders reviewed relied primarily on third-party distributors — meaning dealers and brokers — to sell their loans, and that some lenders were not adequately monitoring the outcomes their distributor channels produced for borrowers. In plain English: the lender approves the loan, the dealer sells it, the dealer gets paid a commission, and nobody is watching what happens to you. ASIC Commissioner Alan Kirkland put it bluntly: responsibility for consumer outcomes cannot be outsourced.

The regulator also identified inconsistent hardship practices, residual debt left behind after repossession, and differing outcomes by borrower location — with people in regional and remote areas disproportionately affected. Complaints against the motor vehicle finance sector have been rising, and ASIC has now issued tailored action letters to the eight lenders involved in the review, recommending improvements in areas including staff training, risk management, and hardship processes.

The court cases make it even clearer

This isn't theoretical. In April 2026, the Federal Court ordered Money3 Loans Pty Ltd to pay penalties of $1.55 million for breaching responsible lending obligations when providing car finance to vulnerable consumers. The Federal Court also found that Diamond Wheels Pty Ltd, trading as Lansvale Motor Group, and Keo Automotive Pty Ltd provided car loans to consumers without a credit licence and charged unlawful and excessive interest charges. Proceedings are also underway against Ausfinancial Pty Ltd, trading as Swoosh Finance, listed for trial in March 2027.

These are not edge cases. These are real Australians who got into cars they couldn't afford, through loans that should never have been written. The market has been operating like this for years. The regulator is finally catching up — but the enforcement comes after the damage is done to real people.

What this means if you're buying a used car right now

Here's the practical translation of everything above. The used car market is softer than it's been in years — good. But if you walk into a dealership, negotiate a great price, and then hand the finance decision over to the dealer, you may be giving back every dollar you saved and then some. The average new car in Australia in 2026 is estimated to cost between $45,000 and $60,000 depending on brand and type — meaning used cars in the $20,000–$40,000 range are genuinely where most Australians are shopping, and where the finance stakes are highest relative to income.

Here's what to actually do:

• Know the fee structure before you sign. Ask for every fee in writing — establishment fee, dealer/broker fee, monthly account fee. Add them up. They are legally required to disclose these, but they don't always volunteer them upfront.
• Get pre-approved finance before you walk in. The lowest car loan rate available right now from independent lenders is 5.66% p.a. (comparison rate 5.66% p.a.) for secured car loans. Green car loans for EVs start even lower, from 5.54% p.a. Dealer-arranged finance frequently costs more — sometimes a lot more.
• Ask who gets paid when your loan gets written. Under ASIC's framework, brokers and dealers must disclose their remuneration. Ask the question directly. If they can't answer it clearly, walk away.
• Understand what happens if you can't pay. ASIC found hardship practices were applied inconsistently across lenders. Before you sign, ask your lender: what happens if I lose my job? What is your hardship policy? Get it in writing.
• Don't let a falling price distract you from a rising loan cost. A $1,500 saving on the sticker price means nothing if you're paying $2,000 more in fees and a higher rate across a five-year term.

The GFV question nobody asks at the dealership

There's one more dimension to this that barely gets discussed in dealership finance conversations: what happens to your money at the end of the loan? On a standard car loan, you pay it off and you own the car — which by that point has depreciated significantly. On a standard Guaranteed Future Value (GFV) loan, you make lower payments but hand the car back at the end and walk away with nothing. You've been paying for use of the vehicle, not ownership of it, and there's no equity payout waiting for you.

Most Australians don't realise there are alternative structures that can give you both lower weekly payments and a cash payout when you return the vehicle — instead of getting nothing back. In a market where used car prices are falling and depreciation is accelerating, understanding what your car is worth at the end of your finance term — and who gets that value — is arguably the most important question in the entire transaction. It's just never the one dealers want to talk about.

The bottom line for July 2026

The used car market has shifted in your favour. That's real, and it's worth using. But the finance market hasn't shifted — if anything, ASIC's findings show it's been working against ordinary Australians for years, with fees, rate markups, and weak oversight baked in by design. A great car price and a bad loan is still a bad deal. Go in with your eyes open, compare finance independently, and make sure you understand exactly what you're getting — and what you're giving up — at the end of the term.

This article is general information only and does not constitute financial advice. Speak to a financial adviser or licensed credit representative before making any borrowing decisions.