2024-04-12 12:16:01
“You can buy a car you like and drive it for a long time. “You should buy the car you want and enjoy it, so why should you think about selling it when you’re getting a new car?”
In Korea, design and fuel efficiency are often considered when purchasing a new car, but in developed countries such as the United States and Japan, used car prices are also carefully examined. This is because it is believed that it is economically efficient to purchase a car whose used car price has not fallen significantly. No matter how low the price of a new car is, people are reluctant to purchase a car that will drop to a bargain price when resold later.
Song Seon-jae, an analyst at Hana Securities (in charge of automobiles), said, “If you look only at economic factors from the vehicle owner’s perspective, the total cost of ownership (TCO) is more important than the initial price paid.” He added, “TCO is ‘new car price + maintenance cost. “It is calculated using the formula ‘Used car price.’ If the used car price is high, the TCO is lower, so (a solid used car market price) is a factor that increases consumer preference,” he said.
So what is the vehicle model that best protects the value of used cars in Korea? Chosun Ilbo [왕개미연구소]Using statistics from the Korea Insurance Development Institute, we analyzed vehicles with a small price decline compared to new cars by dividing them into domestic cars and imported cars.
Hyundai Palisade ranks first in used car price defense. New car price starts from 40 million won./Hyundai Motors
✅ SUV is an honor student with excellent price defense
According to data from the Korea Insurance Development Institute on the 11th analyzing the 2019 new car prices and 2024 vehicle prices of 52 domestically produced vehicle models, all of the ‘price defense honorees’ with high residual value compared to new car prices were SUVs (sports utility vehicles).
Vehicle value refers to the value of the car at the current point in time, and is the basis for car insurance premiums and insurance payment. The Korea Insurance Development Institute, an organization specializing in calculating insurance rates, announces it every three months. Because it is set conservatively, there is some difference from the actual transaction price in the used car market, which is sensitive to supply and demand.
The 3rd place car model with less value over the past 5 years and better price protection was Hyundai Kona (small SUV), and 2nd place was Hyundai Santa Fe (midsize SUV). The first place was Hyundai Palisade, a large SUV. For these three SUVs, the residual value of the vehicle price was 51-55%, and all were more than 50%. Compared to inferior students, whose residual value was only about 42-43%, the gap was large.
Graphics = Chosun Design Lab Kwon Hye-in
An official from the Insurance Development Institute said, “SUVs are practical, there are almost no event discounts at the time of sale, and demand is steady, so the price depreciation is low.” He added, “The interior space is large, so families can ride comfortably, and the driver’s seat is high, so visibility is low.” “Because they are good, preference for female drivers is also high,” he said. This official explained that the Palisade is so popular that even single people who live alone choose the Palisade when buying an SUV due to the trend that the bigger the car, the better.
An official in the used car industry said, “At the beginning of the launch, there were a lot of people waiting for the Palisade and there were not many for sale, so a strange phenomenon occurred where used cars were sold at the price of a new car.” He added, “When you buy a car, it doesn’t take long until the delivery date and you can get it as soon as tomorrow (dealer) A) If you say so, the depreciation must be considered very large,” he said.
In 2020, the car that Samsung Electronics Vice Chairman Lee Jae-yong personally drove to the funeral of the late Samsung Group Chairman Lee Kun-hee was ‘Palisade’./Chosun DB
If we look at the residual value of each vehicle model by breaking it down into 280 items rather than the average of detailed models, the New K5 1.6 Turbo of Kia K5 ranked first with a residual value of 56%. 2nd to 4th place is Hyundai Santa Fe (R2.0 → R2.2 → 2.0T), 5th to 8th place is Hyundai Palisade (3.8 2WD → 2.2 2WD → 3.8 4WD → 2.2 4WD), 9th place is Kia RAY (THE NEW RAY) 1.0 LPi), followed by Hyundai Avante (The New Avante AD Smart Stream G1.6) in 10th place.
✅The top imported car is the Porsche Cayenne
Among 444 imported car models, Porsche Cayenne’s ‘The New Cayenne’ ranked first with a residual rate of 48%. 2nd to 4th place were BMW 620d xDrive GT, 520i, and 620d GT, and Jaguar F-Type P300 ranked 5th with a residual rate of 46.8%. In addition, Honda Civic 2.0, Toyota Lexus NX, and Chrysler JEEP All New Wrangler 2.0 were named. Tesla, the leader in electric vehicles, was not included in the top 10 list, and its residual rate was 40.5%, falling below the middle.
Graphics = Chosun Design Lab Kwon Hye-in
The average residual rate for imported cars ranged from a minimum of 36.5% to a maximum of 48%, which was overall lower compared to the residual rate for domestic cars (41-56%). An official from the Korea Insurance Development Institute explained, “There is a difference in the residual rate because the standards for calculating the number of vehicle passengers for domestic and imported cars are dual.”
Minwoo Han, CEO of Ziccar, said, “Some imported car brands hold large discount events to clear inventory when sales volume decreases. In this process, if new car prices become cheaper, used car prices are also inevitably affected.” CEO Han Min-woo continued, “If a new car is popular, its residual value remains high over time, but since there is no demand for black large cars preferred by high-ranking people such as CEOs, price protection is not good and depreciation is severe.” .
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