Whoever bought a brand new car a year ago is now asking for up to 28% more than the amount paid in the purchase to sell the vehicle, now considered a used one. The distortion that allows profit in the sale of cars even after a year of use, when under normal conditions the vehicle would have suffered a depreciation of 15% to 20%, is due to the lack of models on the market.
After more than a year of limited production due to a lack of parts, during which the automakers directed the available components to the manufacture of more expensive cars, some models, especially in the entry-level segments, have become a rarity. As the prices of new cars, a market benchmark, also did not stop rising amid the context of restricted supply, used car owners noticed an unusual appreciation of their vehicles.
According to a survey based on advertisements published by dealers and used car owners on the Mobiauto, the price of the 40 best-selling passenger cars and light commercial vehicles in Brazil rose, on average, 7.1% after one year of use. The survey compares the prices charged in the first half of this year against the average value of the same models in the zero kilometer condition in the first six months of 2021.
The greatest appreciation occurred in Mobi, from Fiat, whose price, in the Easy version with 1.0 engine, jumped from R$ 41 thousand to R$ 52.5 thousand – that is, the car was 28% more expensive after one year of use. Also noteworthy is the price of the Onix, a model that was no longer produced by General Motors (GM) for five months last year. In the LT version, also equipped with a 1.0 engine, the appreciation was 14.5%: from R$ 65.6 thousand to R$ 75.1 thousand.
“It’s amazing to buy a brand new car, use it for a year and see your equity increase by almost 30%”, he says. Sant Clair Castro Jr.automotive consultant and CEO of Mobiauto.
Going forward, however, the trend pointed out by market analysts is towards stabilization, given the expected effects on consumption not only of rising prices, but also of tighter credit conditions.
The used market, after last year’s record, showed in the first half a 20% decline in purchase and sale transactions involving passenger cars and light utilities, such as pickups and vans. Already in sales of new, the fall since the first day of 2022 is in 15%. With the accommodation in the pace of sales last month, inventories of 145,500 new vehicles are at the highest volume of the last two years, despite all the difficulties of production in the automakers.
The situation is already reflected in a lower impetus of the inflation of used cars, where the rise in prices, which in twelve months reached 17% in February, fell in June to below 15% (14.9%). From March to April, the prices of used vehicles showed deflation of 0.5%.
In the case of zero kilometer cars, however, inflation has been more persistent, reaching 18% in the twelve months through June, as shown by the variations of the product within the IPCA basket, the official price index measured by the Brazilian Institute of Geography and Statistics (IBGE).
“We had gigantic price increases that are already enough to cool demand,” he says. Cassio Pagliarini, consultant at Bright Consulting. “Today, I believe much more in the lack of customers than in the lack of cars on the market. There is a lack of components to produce certain models, but the most decisive nowadays are interest rates and high prices”, adds the expert.
In addition to the escalation of interest charged on vehicle financing, already above 26% per year, the highest rate in the last six years, reports of tougher conditions in credit concessions are growing in the car industry. Banks that previously financed 70% of the value of the car are now agreeing to finance only half (50%) or at most 65%. Average financing terms, as reported by used car dealers, have been shortened from 48 to 36 months.
“Banks began to make greater demands because they fear an increase in default. Credit does not show the same fluidity”, he comments. Enilson Salespresident of phenautothe entity that represents used and used car dealerships.
“You didn’t see a car left over as you see it today. Consumer income didn’t keep up with price increases”, says Sant Clair, CEO of Mobiauto.