What happens to the prices of used cars, what you can choose from, where the cars are delivered from and whether it is profitable to buy them
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Against the backdrop of an acute shortage of new cars in Russia, those wishing to buy a new car actually faced a choice: parallel import or secondary market. With the help of experts, we understand what options are available on the used car market, how much they cost and what will happen to prices in the future.
Motorists refuse to sell cars: nothing can be bought with this money
In January 2023, secondhand car sales began to rise compared to last year. Analytical agency “Autostat” claims that 361,000 cars changed their owners last month (+7%). Their colleagues from “Avtostat-Info” give a different but close figure – 359.3 cars sold (+15.4%).
As explained by an expert in the selection of cars and the author of the YouTube channel AvtoRevizorro Kirill Chernov, at the moment the secondary car market is divided into two parts. In the first case, we are talking about the so-called domestic market: cars that were bought new directly in Russia. Moreover, according to the expert, the situation here is close to catastrophic.
“Those who have a car in good condition will not put it up for sale now. The reason is objective: at the moment it is almost impossible to buy something decent for the proceeds. As a result, cars appear on sale that literally can no longer drive. First, this former car sharing and taxi, such machines have almost no resource left. Such models can be inexpensive, but the new owner will invest much more money to keep such a car running. There are also a lot of “totalized” cars, sawn and welded from many halves of other cars,” said Chernov.
The expert stressed that interest in this part of the secondary housing is rapidly declining. According to Chernov, supply and demand for cars registered in Russia are at a critical stage. “No one needs such a secondary. Sellers and buyers have now realized that there is nothing to catch there,” he said.
A similar opinion is shared by the founder of the Carintrade car buying service and the author of the YouTube channel Pavel Karin. According to him, at the moment there are all prerequisites for the fact that sales in the secondary market will slow down.
“Most often, when selling a car, a person wants to buy something in return. And right now there is no other choice. For example, a car bought a few years ago for 3 million rubles, now a new one already costs 6 million rubles. That is, the driver will not be able to buy a car of the same level with the proceeds. Therefore, it is to be expected that tenure of cars should also increase,” the expert noted.
High-quality resale from abroad is now also a rarity
The second half of the secondary market is cars that are imported to Russia from other countries. According to Kirill Chernov, the number of offers here will only increase over time, because it is becoming increasingly difficult to find more “fresh” cars in good condition and at reasonable prices. Most often, cars are brought to our country from Korea, Germany, the United Arab Emirates, and also the USA (although in much smaller volumes).
In turn, Pavel Karin believes that so far the cars brought from other countries cannot satisfy the demand on the market. According to him, now there is really a lot of information on the Web about such cars, but in absolute numbers, “this is not yet very impressive.”
A large Moscow Region company that sells cars (including used ones) spoke about the high demand for imported cars. At the same time, the dealership admitted that it is not yet possible to fully satisfy the demand with such models. After new cars became scarce in Russia and their prices skyrocketed, customers switched to the secondary market, he said. Many dealers were not ready for this at all. “Before, everyone sat quietly and replenished their stocks of used cars through trade-in. Now this scheme has stopped working and you will have to run around in search of cars. For example, we started to transport cars from abroad. Prices here largely depend on the course. In 2022, it was very profitable to buy cars. Now the ruble has dipped, which, of course, immediately affected the cost of cars. Therefore, as regards the cost, in the future it will depend on the stability of the ruble. But it is still unrealistic to fully cover the demand with the current volumes of cars from abroad. As for the domestic market, it is very difficult to find something interesting there now,” the manager shared his experience.
Kirill Chernov also warned about linking prices for imported cars to the current exchange rate. This is how he explained the difference in the cost of cars between 2023 and last year. According to him, compared with last summer, prices for imported “Koreans” increased by about 200-300 thousand rubles.
“The exchange rate was 55 rubles, plus there were a lot of profitable offers in this country. Accordingly, buying a car from Korea was then a very attractive option. As a result, those prices have gone, as they say, into legends, and it is for this kind of money that many are now trying to buy cars. However, due to the current course, this is no longer realistic. In addition, almost all available and interesting positions have now been removed from the Korean market,” he said.
What cars do Russians choose: for 300 thousand and 700 thousand rubles.
According to “AUTOSTAT”, in January of this year, Lada became the most popular cars on the secondary market. So, in the first month of 2023, 79.4 thousand of these cars changed their owners. In second place are Toyota cars (42.9 thousand units). This is followed by models of Korean brands Hyundai and Kia. In the Russian secondary market, 20.7 thousand and 20.4 thousand such cars were sold during the month, respectively. Closes the top 5 Japanese Nissan (18.3 thousand units).
Kirill Chernov noted that the preferences of Russians in the used car market are gradually changing. According to him, clients now “decided to abandon the experiments.”
“Earlier, the buyer was quite ready to spend 4-5 million rubles. for something interesting, for example, for a rare model or a “charged” car with a powerful engine. However, now the policy of clients in this matter has become more pragmatic and conservative,” the expert explained.
According to him, now one of the most popular requests on the secondary market is the German crossover BMW X3. He stressed that such machines, brought from other countries, now fly apart in seconds. And this applies even to crossovers with flaws and high mileage.
“The most interesting thing is that if you bring and put up a “three-ruble note” or “five” BMW for the same money, then these cars are unlikely to be bought. Even if it is a car in a very good configuration,” says Kirill Chernov.
Vitaly Punyakov, a member of the Union of Automobile Experts and Appraisers, spoke about the growth in the number of requests for cars with a clear technical condition and transparent service opportunities.
He noted that the most popular budget in the regions is 300,000 rubles. However, according to Punyakov, recently even the “fours” and Lada Priora have added at least a third in price, so it’s not easy to pick up something for this money now on the secondary market. The next popular budget is 700 thousand rubles. As the expert said, since last year, the bar of a car for this money has fallen dramatically. According to him, if earlier it was a strong third-generation Ford Focus, now it is a similar second-generation model.
“The desire to buy what you want has not gone away. Just recently, I closed the selection of Chevrolet Tahoe. This is a huge American SUV that constantly asks for a lot of investment. However, this does not always stop people, ”the expert concluded.
Parallel import or secondary
In the context of an acute shortage of “official” cars in car dealerships, in addition to the secondary, Russians began to pay attention to new cars that dealers bring privately under the parallel import scheme. However, there are nuances here. Chief among them is the lack of a guarantee. Although Rospotrebnadzor has already stated that the dealer is in any case responsible for the sold car in accordance with Russian law, the sellers are still trying to convince drivers of the opposite.
“There are popular new Koreans, they are brought from Kazakhstan. However, the official warranty does not work on such machines. It turns out that this important bonus when buying a new car for a potential client is leveled. For example, there is a Hyundai Tucson brought privately by a dealer for 3.5 million rubles. in a simple package. The client understands that there is still no guarantee, and for about the same money he can take a three-year-old BMW X3. As a result, he buys a German model, because it is still more interesting, ”Chernov explained.
One of the major car dealerships in Moscow is also skeptical about the parallel import scheme. The manager of the company noted the absence of a guarantee, and also stressed that dealers often bring cars to our country in older trim levels, the prices for which are extremely high.
“Look at all these conditionally available sedans and crossovers that are being brought in. For this money, you can easily find a BMW or Mercedes-Benz with us, which, although with mileage, are in no way inferior to new cars in terms of resource. Plus, on the secondary market, the cars will be clearly more interesting in terms of options and trim levels. We have nothing against parallel imports. I think in the future it will certainly help to saturate the used car market,” said the seller.
Secondary market prices are rising
The average cost of cars on the secondary market in January 2023 amounted to 1.3 million rubles. This figure is 35% more than in the same period last year, according to a study by Avto.ru (available from Autonews.ru). And most of all, according to analysts, Russian-made cars increased in price.
“We analyzed advertisements for the sale of used cars of different ages and saw that the most significant increase in price was shown by “fresh” cars that are no more than five years old. This segment is in high demand and usually depends on new cars, which have risen in price dramatically over the past year. Also, there is a shortage of some models on the market, which are now almost impossible to find among new ones, but among used ones it’s real,” said Alexei Mukhanov, head of the Avto.ru research and client analytics group.
Vitaly Punyakov agreed that the lack of new cars drove up the cost of the cars left in the dealers’ warehouses. In turn, prices in the secondary market have grown up after the primary.
“The older the car and the lower its quality, the slower it rises in price. People remember last year’s prices: before these figures were the top of the market, and now it’s the bottom. Because of this, potential customers have a distorted perception of the price. It seems that nothing has changed, but the condition of the cars for this money does not fit into expectations,” the expert explained.
In one of the metropolitan companies selling used foreign cars, on the contrary, they announced a gradual reduction in car prices. According to the manager of the car dealership, in March-April, the prices for cars really skyrocketed, but since the summer they began to gradually decline.
According to market participants, even a depreciation of the ruble now cannot lead to a significant rise in the price of imported cars and second-hand offers – the difference will be that sellers will start earning less, since Russians are not ready to buy cars that expensive. A new wave of price appreciation may come if the exchange rate falls below 80 rubles. per US dollar.