Keep calm. What is really happening with the prices of used cars?
In the media, social networks and communities of motorists are increasingly saying that the prices of used cars in some countries "soared by 30-60%." Like, and Ukrainians should prepare to return to "Lanos", or significantly increase budgets for the purchase of the same models. But is everything so bad? We understand what is really going on and whether there are any grounds for concern.
The main markets for Ukrainian dealers engaged in the delivery of cars from abroad are the countries of the European Union and America (USA, Canada). Imports from China, Georgia and South Korea are also developing, but imports from there are still insignificant. To find out the current state of affairs with car prices from these markets, experts from the Institute of Car Research analyzed how the average prices for popular models have changed.
Imports from EU countries
From the beginning of 2021 and for the next 11 months, European models such as Volkswagen Golf, Skoda Octavia and Renault Megane were the most frequently submitted for the first registration. Volkswagen Passat, which was imported the most, was not taken into account, as the model of the same name is available for the US market.
The change in price from the beginning of the year, in currency terms, is fully in line with market rules. All these models have naturally become cheaper, because in fact their age has increased by one year. The same can be said about the change in the price for the whole array of cars of 2008 production (these most often come to us from the EU). Everything happens according to the general "classic" market rules.
Imports from America
Examples for this group are Nissan Rogue, Volkswagen Jetta and Ford Fusion. Letʼs find out the average prices for imported cars with the most massive year of production, and determine the change — these models have become cheaper, or perhaps more expensive during the current year.
The situation here is similar to that recorded in the segment of cars from the EU: popular "American" models have fallen in price since the beginning of the year.
So far there is no massive rise in prices
The conclusion that can be made by reading the data provided by our partners, the largest automotive marketplace in Ukraine AUTO.RIA, is quite simple and unambiguous. So far, none of the popular import models in Ukraine has risen in price, nor has there been an increase in prices for some areas.
The same can be said for a number of other models that we have researched, but in order not to overload the publication, they were not included in the text or on the slides. Currently, price fluctuations, the dynamics of these processes, as well as the difference between the initial value in January and the current situation in December 2021 are fully consistent with market rules.
The secondary market (domestic resale of used cars) is no exception — there are no "spikes" or "failures" at the moment — a fairly stable picture, both in terms of volume and model range, as well as prices.
Why then do "everyone" talk about rising prices?
It so happened that in the pursuit of "sensations" the media often highlights "shock content" based on fragments of research, and "forgets" to provide a comprehensive overview of the situation on the world market. In fact, some, individual car segments, have really become more expensive. For example, in the United States, this applies to cars aged 1-3 years, which are still under warranty or have recently gone beyond it, and they can be profitably resold second-hand. In particular, those buyers who were told in car dealerships that they will have to wait several months for one or another new model.
As for auction cars, since the prices there are not set by local buyers, but by bidders, in most cases from other countries, such cars could not become more expensive, because the principle of pricing them is completely different. Also in the US, the volume of damaged cars is not declining, as local rules on "inspection" and the cost of repairing a car after an accident have not changed. And it is unlikely that the Americans themselves began to drive more carefully — so in this direction now everything remains in place. The growth of "winning" rates at auctions indicates only an increase in demand for such cars.
As for Western European countries, local analysts have already reported on the rise in prices for used cars, for example, the DAT Group noted an increase in "prices" in Germany for cars aged 3-5. According to the company, in some cases used cars can be more expensive than new ones. These are the consequences of the global crisis in the automotive industry and the shortage of new cars.
In Poland, the AAA Auto network recorded a decrease in auction activity and an increase in car prices by 18% compared to last year. Our partner, the Polish car research institute SAMAR, reported a 12% increase in local buyersʼ interest in used cars imported from other EU countries.
However, it should be understood that these increases or increases in interest are primarily related to cars under 3-5 years old, which are imported to Ukraine, in particular from the EU, in extremely small quantities. As well as the market for "whole" cars with mileage in the United States is actually separated from local insurance auctions. Therefore, there are currently no grounds for concern, confirmed by at least one reliable study . All prices are now kept at the level that should be in accordance with all market rules.
However, this does not mean that the trend of rising prices for used cars will not reach Ukraine. Experts from the Institute of Automotive Research predict a possible increase in prices for cars with mileage of 15-20% in the first half of 2022. So now is a good time to buy a car.
Keep calm and follow the updated information on the website of the Institute of Car Research!