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The “secondary” price fall: why cheaper cars with mileage

For the first time after the collapse of the ruble in late 2014, used cars have become cheaper, partly due to some reduction in demand on the secondary. Which models turned out to be really affordable and on what kind of discount are offered to the buyers?

Prices slid down

Unlike the new car market, where the price tags are directly dependent on the exchange rates on the resale value of the car, as you know, is primarily determined by the level of demand. It is significant that since December 2014, when after the collapse of the ruble, many motorists refused to buy new cars in favor of used, the price beushki has grown steadily. According to the Agency “AUTOSTAT”, the brand has risen since then, on average, 32 per cent, from 430 thousand rubles in December 2014, to 568 thousand in December of 2016. For comparison, the weighted average cost of new cars over the same period increased by 41%, and for the first seven months of the current year and by another 3%. The demand for them this year began to gradually recover (+8.5% in January-July 2017), indicating that the habituation of consumers to new prices. Against this background, the sales of used cars had virtually ceased to grow (+0.8% for 7 months. 2017), and it kind of affected the price level, which for the first time since the end of 2014 began to decline. As of 2017 the average cost of a car amounted to 535 thousand rubles, as against 568 thousand in December of 2016, i.e. was lower by 6%. The cars are sold, mostly, with discounts that reach up to 10-15% from the original price tag.

“In recent years the market of new cars has decreased, and now we are celebrating the aging of the fleet. In this regard, the average cost of a car in the Russian fleet is reduced. At the same time, today we see in the new car market sales growth budget models. Often their buyers already own an inexpensive car and buying a new one, sell the previous one. From this the market gets more cars in the budget segment,” says the Director of the division for the sale of pre-owned Blue Fish company “Rolf” Alexey Barinov.

Top 10 brands on the market of cars with mileage, PCs (data of the Agency “AUTOSTAT”)

No. Mark 7 months. 2017 Rev. %
1. Lada 806 186 -1,8
2. Toyota 330 099 1.6 million
3. Nissan 158 330 1,8
4. Hyundai 131 837 8,6
5. Chevrolet 126 679 2,1
6. Ford 115 430 2,1
7. Volkswagen 111 290 5,9
8. Kia 108 269 11,6
9. Renault 96 503 8,2
10. Mitsubishi 88 970 And 2.8
Just 2 472 946 0,8

Lower prices for used cars is observed in the dealer segment, while pricing the “official” as it is known, differs from private sellers and marketplaces, including the expense included in the cost of pre-sale preparation, verification of legal purity of the car, etc. For example, the average price of used vehicles sold in 2017 through the group of companies “Avilon”, amounted to 1 million 127 thousand roubles to 1 million 183 thousand roubles a year earlier, a decrease of thus 5%. The Director of the dealer centre “Avilon-trade” Yuri Yelistratov connects it to a greater extent with the fall in the purchasing power of the population, lower rates on loans for new cars and gaining momentum in the primary market support programs from importers.

Cheaper than ever?

Top 10 models on the market, pre-owned, PCs (data of the Agency “AUTOSTAT”)

No. Model 7 months. 2017 Rev. %
1. Lada 2114 87 213 -1,1
2. Lada 2107 80 228 -5,4
3. Ford Focus 73 270 2,2
4. Lada 2110 67 030 -5,1
5. Toyota Corolla 57 777 -2,7
6. Lada 2170 57 866 4,5
7. Lada 2112 49 076 -3,6
8. Lada 4×4 53 764 -2,7
9. Lada 2115 48 766 -1,2
10. Toyota Camry 42 505 28,7

Heaviest falling prices of domestic cars has been largely discontinued, even though they are leaders of sales on the secondary market, but their cost is because of old age and the already low on the market. So, as of July this year, the hatchback Lada 112 fell by 4.9% compared with December 2016, says the data “Avito Avto”. Sedan Lada 115 lost 4.5 percent, while in the summer the price “tag” for the first time fell below 100 thousand rubles. The tenth and fourteenth of the model became cheaper by 3.6% and 4.3%, respectively. The only VAZ car, which, by contrast, have increased in price, was the SUV Lada 4×4, whose value increased by 3% YTD and by almost 10% compared to the price tag a year ago.

Used Lada 4×4 on the secondary market in good condition are difficult to find, experts say.Used Lada 4×4 on the secondary market in good condition are difficult to find, experts say.

As explained by Alexey Barinov, the market remains smaller cars Lada 4×4 in good condition, and the demand for this model remains. Because of this the buyer is willing to pay more for a decent copy.

Prices for popular mass cars with mileage also reduced, although to a much lesser extent than on the Frets. So, the Ford Focus is the undisputed best seller among used cars, fell by 1.8% and as of July this year, offered in an average 382,5 thousand rubles. But the cost of a Toyota Corolla, despite a slight decline in demand, has not changed and amounted to 422 thousand rubles (-0.4 per cent).

“The demand may decline, but the decline is likely correlated with the volume of proposals and the cost is maintained at an adequate level. New Ford cars, for example, in previous years, plummeted in sales and now to find good fresh Ford with the mileage more difficult than three years ago, thereby increasing or preserving its value,” says Director of sales Department pre-owned GK “Avtospetstsentr” Artem Samorodov.

Second life Solaris

In General, prices for used cars will continue to decline slowly until the end of the year of trend change should be expected, predicts “AUTOSTAT”. In this case, despite the fact that the curve of monthly sales of cars with mileage periodically gets in the red zone, the result, in 2017 should remain positive. Under the baseline forecast, the secondary car market this year may grow by nearly 3%, to 5.34 million passenger cars.

The best dynamics on the secondary shows Hyundai Solaris, obviously, because of the large volume of sold new cars.The best dynamics on the secondary shows Hyundai Solaris, obviously, because of the large volume of sold new cars.

According to Alexei Barinov, while the fleet continues to age, respectively, and the average price of used cars will decline. At the same time, if we consider the prospects of buying a car of a specific model and of a certain age, its price, as before, will depend on the cost of a similar new machine and, accordingly, will grow, following the new car market.

Dynamics of prices largely depends on the seasonal swing in the number of proposals, said, in his turn, Artem Samorodov. “A good car will always be the price, bad will always be bad popular. Dramatically and drastically the picture changes only in periods of sharp changes in the monetary sector,” he says.

Statistics show that the lack of demand in comparison with last year have mainly Lada, although sales volume of the products of AVTOVAZ are still out of reach. Here, for example, the most popular foreign car with mileage Ford Focus shows a small increase in sales, which allowed it to settle in the top three bestsellers of the secondary market. The best pattern was on account of the previous generation Hyundai Solaris — it sales for seven months of 2017 increased by 29%, with the model getting into the top-10 most popular used cars.

Cross worlds

“Often on the used machinery market, the greatest demand is the same model as in the primary market. Bestsellers of the new car market — for example, today’s Hyundai Solaris be demanded on the secondary. If in recent years we have purchased many cars of a particular model, then over time they fall on the secondary market and show there large volumes of sales”, — says Alexey Barinov.

The future prospects of the secondary market is also largely related to the dynamics of sales of new machines, which are recently gaining momentum. On the one hand, the stabilization of the economy and improve the well-being of Russians of the buyers, of course, will return to the primary market. On the other hand, with the change of car, they will sell their old car, which in turn will contribute to the increase of proposals on the secondary housing. However, the gap between sales of used and new machinery, which in recent years reached a record 4:1, will gradually decrease, although an absolute advantage will remain for Buscemi.

Says Alexei Barinov, the market for pre-owned stabilized, supply and demand reached equilibrium. Further dynamics of the market in any case will depend on the sales volume of new cars: the growth of the primary market, contrary to popular belief, entails the growth of the market for used machinery, as in this case the market gets more marketable brand.

The “secondary” price fall: why cheaper cars with mileage”Secondary” price fall: why cheaper cars with mileage

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