The automotive market today is experiencing a period of profound crisis, certainly due to the Covid pandemic that hit the entire planet two and a half years ago, in the spring of 2020, but also due to the consequences of this dramatic situation.
In fact, the purchasing power of Italian motorists (and in Europe) has dropped a lot due to work difficulties (many businesses have been forced to close for a long time to contain infections), and that’s not all. Raw materials are in short supply, electronic components such as microchips and semiconductors too, and car production slows down a lot – and with it deliveries are also late. To make the situation worse then there are the war in Ukraine and the expensive gasolinewith skyrocketing fuel prices.
For this and for hundreds of other reasons, motorists in Italy very often buy a used car. There are also many families who this year, on the occasion of the summer holidays, have decided to resort to the purchase of a second hand car, preferring it to the rental option. A scenario dictated by the continuous increases in energy and fuel prices, which hinder the programs of families. For more detailed information, we contacted Carvago, one of the largest online platforms for the sale of used cars in Europe. The Country Manager for Italy, Antonio Gentile, answered our questions.
Can we consider 2022 a positive year for the second-hand market in Italy?
In the first half of 2022 the used car sector suffered a drop of -10.8% (ACI data) in Italy. In any case, Carvago was launched in Italy shortly before the end of 2021therefore, the rate for the first half of 2022 lacks comparison with last year.
At the very least we can talk about the trends and circumstances which, in my opinion, have the greatest impact on the market. Long and even extended delivery times for new cars they are a boost for our segment. On the other hand, the problems of the manufacturers have already had an impact on the volume of cars up to 2 years of age in the aftermarket. The war in Ukraine and the instability of the Italian economy are major negative factors, so I would not evaluate the year in general, but for us it was very good.
What is the main lever that pushes a user to buy a used car?
Used cars that have good service and an attentive owner can be used for years by a second owner, who may even sell them to a third party, with less loss in value than a new one. One of the most important reasons over the years is, surely, the fact that buying a used car means to be able to afford a superior car on the same budget. If we compared the cost of the brand new Jeep Renegade, a small crossover with hybrid engine (around 40,000 euros) with a premium SUV like the Mercedes-Benz GLC 250 for less than 40,000 euros, the comparison would not hold up.
Nowadays, apart from the reasons mentioned, there are many customers who are looking for almost new cars, let’s say up to 3 years, just because they don’t want to wait nearly a year for a new vehiclewhen their demand does not fit the cars in stock and this is a huge advantage for a market like ours with a much wider offer than typical dealerships.
What kind of car is the average Italian user looking for today?
According to our latest analysis of the Italian used car market which summarizes the second quarter of 2022, the type of compact body it is still the most popular in Italy, with the undisputed domination of the Fiat Pandaimmediately followed by the VW Golf and the Fiat 500. On the other hand, the popularity of SUVs is growing as in other countries and, unlike other European markets, sports coupes and convertibles have a large number of passionate customers in Italy , although the popularity of this type of vehicle is in sharp decline.
What types of food are Italians looking for on the second-hand market?
Despite the record prices of both types of fuel, Italians are still looking for more petrol and diesel cars. The demand for alternative fuel cars is steadily increasing, but combined with government incentives to purchase new low-emission cars, Italians looking for an alternative fuel car will in most cases find it more advantageous to buy one. new.
On the other hand, a real limit will soon be reached in the capacity of the Italian infrastructure and, without investments in it, it will be very inconvenient for the user to use an electric car if he does not have the possibility to recharge at home or if he makes longer trips.
What is the average expense of a user for a used car?
Each car or manufacturer has a different circumstance. The first factor is the age of the car: a young car, perhaps still under warranty, is comparable to a new car. As the miles and years go by, expensive repairs also increase, making the car more expensive to run. When we buy a car through Carvago, we deal individually with customers all investments that are derived from the standard care plan of a given model.
The type of car, the model, the bodywork are other determining factors. When using a light Fiat Panda, the costs of replacing brakes, tires and other wearing parts can be a quarter lower than in large SUVs, regardless of the manufacturer’s brand type, where the prices of individual parts vary greatly.
The summer season is usually the best time to buy a used car. How are Italians behaving today?
The reality of today’s events tells a different story. May and June are months of high peaks, until the children collect their report cards; demand slows down towards the end of July and starts growing again in September. Like other markets, the Italian one has also registered a rebalancing of the relationship between supply and demand, which has led to the halting of the unprecedented trend of increase in used car prices and, moreover, some cars are becoming cheaper.
How is the conflict in Ukraine and rising inflation on the second-hand market impacting?
The war in Ukraine has impacted the European economy in general, not just our segment. The conflict had local effects on the used car market, for example in Poland, where Ukrainians bought used cars for the National Guard and for personal use, as the Ukrainian government temporarily exempted the importation of cars for its own citizens.
Otherwise, Russia’s foray into Ukrainian territory has had an impact especially on the car manufacturers, as the key components are produced on that territory. As for inflation, my personal opinion is that it hasn’t significantly affected used car prices, and if it does, it will show up no earlier than autumn. I believe, otherwise, that unlike other segments, the impact will be minimal. As I said, some used cars are even getting cheaper.
What do you think about the trend of the used car market in Europe?
Due to the continuing problems in producing new cars and pricing individual models in manufacturers’ catalogs, I believe that the current change in the exchange rate and the lowering of used car prices are only a temporary phenomenon, which will end. no earlier than the beginning of September and no later than Christmas.
Interview kindly granted by Antonio Gentile, Country Manager Italy of Carvago
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