The price of used cars maintains an upward trend. In certain models and segments there is the paradox that used cars are not being devalued. What’s going on? Is it a temporary situation? We analyze the serious problem that threatens the used market and that is related to new cars.
In recent times, the paradox, or rather a bizarre situation, is taking place, that used cars are not devaluing. Moreover, in certain models and/or segments, prices, instead of having stabilized, prices are growing. This means that a used car costs more today than it did one or even two years ago. It is true that there have traditionally been some exceptions, but that prices are rising in general is a clear symptom that things are not going well at all.
But, What is causing this serious problem that threatens the second-hand market? Let’s go into detail and review all the keys to discover what is behind the increase in the cost of second-hand cars and, above all, go one step further to find out when the situation will normalize and if, in the short term, we will continue to suffer what we already It is considered a “perfect storm”.
New car buyers are pushed out to the used market
The stock crisis at dealerships due to global microchip shortage has benefited the used car market for some time. However, and as we have anticipated in previous articles, sooner or later these problems would be transferred to the second-hand vehicle sector. The number of new car buyers being “pushed out” into the used market continues to rise.
It is important to put yourself in the shoes of a citizen who goes to a dealership to buy a new car and the brand offers an average delivery time of around or even more than half a year. On many occasions it is an unsustainable period of time. Therefore, and given the shortage of new vehicles, you have no choice but to opt for the purchase of a used car.
Despite the fact that in recent months there has been some decrease in used car transfers in relation to last year’s data, the graph with the evolution of Used car sales show an upward trend. To the increase demand in certain age groups, especially pre-owned cars
with up to 3 years old and the so-called “mileruista cars”, that is, used cars with more than 10 years old whose price allows you to pay for the purchase in cash without much effort.
The rate at which the demand for these used cars has grown has been much higher than the entry of stock. In this way, when supply is reduced, we are faced with the situation of a rise in prices. Something logical in an environment of high demand and low supply.
In search of second-hand cars that are not in Spain
There is another problem that we must put on the table to have a broader and more complete analysis. Companies are not renewing their vehicle fleets due to long delivery times for new cars. Therefore, the powerful generator of second-hand cars represented by the renewal of company fleets is largely paralyzed.
As the offer in the Spanish territory is scarce, private and/or professional clients are turning to imports. That is why it is one of the sales channels that is growing the most. It is logical that they choose to search, for example, Germany, for cars that are not found in Spain.
Unfortunately, there are no signs to suggest that this situation will improve in the short term. Moreover, taking into account all these data, it will be necessary to wait for the microchip crisis to improve or be resolved. But, When will the global microchip shortage end? Large giants of the automotive industry such as BMW, Mercedes-Benz and Volkswagen, set their sights on the year 2024.
When things return to normal at dealerships and new cars begin to be delivered at a minimally acceptable rate, much of the pressure that the second-hand market is suffering will be eliminated. It will be then when we begin to see a decline, or at least a stabilization of prices. Until this happens, there will be a very serious situation where certain buyers will even be pushed out of the used market when until just a few years ago his income level allowed him to buy a new car without much effort. These are turbulent times.