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Second-hand car prices are reaching new and new records. The reasons: the pandemic, the shortage of chips for new cars and high demand, he says Deutsche Welle.
Whether directly on the street or on the Internet – usually the choice of used cars is huge. In Germany, more used cars are sold than new ones. But now this market is swept away.
“We currently have more customers than cars. Used cars have become scarce goods,” said Thomas Pecrun, vice president of the ZDK trade union.
Some used cars are more expensive than new models
Due to limited market choices, customers need to dig deeper into their pockets. According to Pecrun, prices have jumped by 5 to 10 percent. He says there are even second-hand cars a few kilometers away that are more expensive than new ones in the same class, which take longer to wait.
“The market has gone crazy,” said Martin Weiss of technology company Deutsche Automobil Treuhand (DAT). He confirms that used cars are now as expensive as ever. According to him, the increase is between 5 and 15 percent, and in some cases significantly more. Most diesel cars are now more expensive than in the first years after the Dieselgate scandal erupted.
Fewer new cars
The main reasons for the explosion of prices in the second-hand car market are the pandemic and the continuing shortage of chips. On the one hand, due to the crown crisis in 2020, fewer new cars were produced. On the other hand, fewer car rental companies invest in new company cars, which are otherwise sold after some time and enter the used car market. It has also reduced the number of new cars that are registered only for a short time, for example for display in a car dealership or used for test driving. “It’s just that far fewer cars reach the second-hand market,” Pecrun said.
And because buyers sometimes have to wait up to a year to deliver a new car – due to a shortage of chips – many of them decide to buy a used car, which further shrinks the market.
No improvement is expected before 2023
Things are unlikely to change much next year. “Also in 2022, high prices for second-hand cars will remain,” Pekrun predicted. Weiss also does not expect the market to return to normal before 2023.
As early as 2020, prices began to rise. According to DAT, Germans paid an average of 14,730 euros per used car – 18 percent more than in 2019. By comparison, in 2001 a second-hand car in Germany cost an average of 8,310 euros, according to the Frankfurter Allgemeine Zeitung.
Only used electric cars and plug-in hybrids are profitable
However, the increase does not affect all segments of the second-hand car market. “We don’t see an increase in prices for electric cars,” said Weiss. The reason for this, on the one hand, are the state premiums for the purchase of an electric car, and on the other – the many technical improvements that create the feeling among buyers that they are getting an obsolete product. Also with plug-in hybrids there is no serious increase.
Second-hand cars are the cheapest when purchased from their previous owner or if they are put up for auction. However, this implies that the buyer is car literate, otherwise he risks getting a car with many shortcomings.
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