Why New and Used Cars Are Increasingly Expensive

If you are thinking of selling your car, this is the best time. Figures from the automotive sector indicate that the trade in used cars has boosted in recent months, both in value and demand, due to several problems that the market for new vehicles presents worldwide and in Colombia.

According to figures from the National Sustainable Mobility Association (Andemos), quoted by the newspaper La República, while sales of new vehicles decreased in the first months of the year, sales of used vehicles increased considerably.

Figures from the Runt and ANDEMOS calculations showed that 19,219 new vehicles were registered in February, which represents a drop of -2.4% compared to the same month last year when 19,689 units were registered.

On the other hand, the transfer of vehicles for the month of January showed an increase of 35%, due to the fact that in the first month of 2021 44,949 were carried out and in that period of this year 2022 60,461 were registered. For the month of February the figure fell, but kept the increase at 8%, last year there were 92,566 compared to 99,843 in the same month this year.

The highest number of transfers were recorded in the departmental capitals, and in the most purchased brands on the market such as Chevrolet with 18,228 vehicles, followed by Renault with 9,843 and in third place Mazda with 4,868.

As is common in the market, an increase in demand is followed by an increase in the price of the product. Thus, according to the newspaper La República, the 2014 Chevrolet Sparks reached prices of 35 million and the Mazda 3, which is one of the favorites in the Colombian market, recorded transfers of 40 million.

“The market contraction is due to the low availability of inventories, a situation that has hit the sector since last year. This situation can also be seen in the sharp falls of some brands in February,” said Oliverio García, president of ANDEMOS.

Since before December 2021, an international logistical problem has been evident for the market, due to the shortage of containers that has affected different sectors of trade, including that of vehicles.

Currently, buying a car at a dealership can mean waiting up to a year for some brands to receive it and there may be an increase in the agreed price, so several potential customers prefer to access a used one in good condition.

“There are dammed deliveries. So it is being sold with delays and since there is such a high demand for vehicles, used vehicles have gained a lot of strength. More or less, for every new car sold, seven used cars are being transferred,” Eduardo Visbal, Fenalco's vice president of foreign trade and automotive market, told the newspaper El Espectador.

However, this is not the only situation that the vehicle market has had to face in recent months, as explained by the aforementioned newspaper, they also affect the shortage of chips that resulted in the container crisis. This is compounded, albeit mildly, by Russia's war against Ukraine in eastern Europe.

The RUNT figures, quoted by El Espectador, show the uptick in used vehicles. While in November 2021 there were 680,000 car transfers and 380,000 vans, in 2019 the figures were 532,793 and 275,026 respectively.

Other variables that are contemplated for the dynamism of the vehicle trade are also the pressure that the implementation of the peak and plate extended in Bogotá since January 11 entailed. According to Councilwoman Diana Arando, the purchase of vehicles in the city so far this year increased by 7.6% and that of motorcycles by 35.9%, with January being the month with the highest increase compared to the same period in 2021.

This market, given the scarcity of some references, is once again turning interest in used vehicles, which have had a lower depreciation in the price per kilometre, than was the case under normal conditions in the sector.

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