Used car prices rise up to 28% with lack of models in the market

RIO DE JANEIRO, BRAZIL – Who bought a brand new car a year ago is asking up to 28% more than the value paid at acquisition to sell the vehicle, now considered a semi-new. The distortion that allows profit in the sale of cars even after one year of use, when under normal conditions, the vehicle would have suffered depreciation of 15% to 20%, is due to the lack of models in the market.

After more than a year of limited production due to lack of parts, a period in which automakers directed the available components to the manufacture of more expensive cars, some models became a rarity. As the prices of new cars, the market reference, have also not stopped rising amid the context of restricted supply, owners of used cars have noticed an unusual appreciation of their vehicles.

According to a survey based on the ads published by dealers and used car owners on the Mobiauto website, the price of the 40 best-selling passenger cars and light commercials in Brazil rose by an average of 7.1% after one year of use. The survey compares the prices charged in the first half of this year with the average value of the same models as new cars in the first six months of 2021.

The highest valuation was observed in Fiat’s Mobi, whose price, in the Easy version with a 1.0 engine, jumped from R$41,000 (US$7,600) to R$52,500 – that is, it became 28% more expensive after one year of use. The price of the Onix, a model that will no longer be produced by General Motors (GM) for five months in 2021, also draws attention.

In the LT version, equipped with a 1.0 engine, the appreciation was 14.5%: from R$65,600 to R$ 75,100. “It’s amazing to buy a brand new car, use it for a year, and see your equity increase by almost 30%,” comments Sant Clair Castro Jr., CEO of Mobiauto.

SCENARIO

From now on, however, the trend indicated by analysts is stabilization. After the record in 2021, the used car market showed a 20% decrease in purchase and sale transactions involving passenger cars and light utility vehicles, such as pickups and vans, in the first semester.

As for new car sales, the drop since the first day of 2022 is 15%. With the decrease in sales in June, the inventories of 145,500 new vehicles are at their highest volume in the last two years, despite all the production difficulties at the automakers.

The situation is already reflected in a lower inflation impulse for used cars, where price increases, which in 12 months reached 17% in February, fell in June to below 15% (14.9%). From March to April, used car prices even showed a deflation of 0.5%.

DEMAND

In the case of zero cars, however, inflation has been more persistent, reaching 18% in the 12 months to June, as shown by the product variations within the IPCA basket, the official price index measured by the Brazilian Institute of Geography and Statistics (IBGE).

“Today, I believe much more in the lack of customers than in the lack of cars on the market,” says Cassio Pagliarini, a consultant at Bright Consulting. “The most determining factor today is interest rates and high prices.”

In addition to escalating interest rates on vehicle financing, already above 26% per year – the highest rate in the last six years – reports of stricter credit conditions are growing in the auto industry. Banks that used to finance 70% of the car’s value are now willing to finance only half or at most 65%.

“The banks have started to make higher demands because they fear an increase in defaults,” comments Enilson Sales, president of Fenauto, an entity representing the sales of used and semi-new cars. Saint Clair, from Mobiauto, adds: “We didn’t see cars in surplus like we do today. The consumer’s income did not accompany the price increases.”

With information from Exame

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