Buying a used car in the current 2022 will be an increasingly difficult undertaking, mainly due to the crisis in the new car market created by disrupted supply chains and the aftermath of the war in Ukraine. Thus, although the used car market continues to grow, dealers are beginning to face a shortage of second-hand cars.
All this is happening after the last 2021, the prices of used cars had already reached record highs. This is clear from the analysis of Matas Buzelis, automotive expert and head of communications at carVertical.
One of the main reasons for the current situation is the crisis in the new market cars. Manufacturers are beginning to limit the production of vehicles to maintain it in smaller but still stable volumes. This change in the production of new cars is slowing down the entry of cars into the used car market. Therefore, car owners postpone their sale or do not get rid of them at all.
“Those who are interested in buying a used car are now choosing from the most limited and at the same time the most expensive offers on the used car market. However, the limited supply of used cars does not mean that buyers have to give up procedures that protect them from fraud. On the contrary, buyers should check the history of each used car, as the choice is very limited, “says Buzelis.
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According to him, used car dealers can buy everything they can get their hands on, without paying much attention to the condition of the car. However, the risk of buying a used car in poor condition can be much higher than, for example, one or two years ago.
Unpredictable prices for used cars
In 2021 prices used cars had already reached record highs. Although they stabilized and even began to fall by the end of the year, the Russian invasion of Ukraine created an unprecedented situation in the used car market in Eastern Europe.
For years, buyers of used cars from Ukraine have been turning to Poland, Lithuania, Slovakia and Hungary. Although newer cars are more in demand in the domestic markets of these countries, Ukrainians have bought many cars over the age of ten, especially those with economical but “dirty” diesel engines.
On the other hand, the reduced flow of customers will change the used car market in Ukraine’s neighboring countries. The prices of moreold cars they are likely to fall as traders try to reduce their losses in order to adapt to the current situation.
The impact of fuel prices
Fuel prices have exceeded the critical limit of 2 euros per liter in many European countries, provoking interest in changing daily habits.
“Rising fuel prices will make some drivers travel less. People can reduce their annual mileage by choosing public transportation or other alternative modes of transportation. “Less mileage would mean a reduction in accidents, which in turn would lead to savings in running costs,” said expert Buzelis.
This would reduce the number of cars on the road, but higher fuel prices are also increasing interest in fuel-efficient cars.
This means that diesel vehicles can be of interest due to unsurpassed fuel consumption on the road. However, this trend will be limited to countries where there is no taxation of vehicles with higher CO2 emissions.
Rising fuel prices will encourage people to invest in used electric cars. Despite rising energy prices, the total cost of owning electric cars remains lower, and if solar energy is used to charge them, they may be even lower. It is estimated that charging with solar energy will save 600-800 euros per year.
Broken supply chains
According to Matas Buzelis, although the Russian market is new When not the largest in the world, it plays an important role in the car supply chain.
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Russia exports valuable components for the automotive industry. Germany, for example, relies on titanium, iron and palladium from Russia. In addition, with 108 million tonnes of iron ore mined in 2021, Russia is the fifth largest producer of iron ore in the world and supplies European steel producers, who are now facing higher prices and possible difficulties in supplying iron ore. metal from other sources.
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The Russian invasion also affected the automobile industry in Ukraine. For example, German carmakers such as BMW and Volkswagen use a large Ukrainian cable bundle supplier. In addition, Ukraine is the third largest producer of nickel and aluminum in the world – two extremely valuable raw materials needed for the production of components for batteries and electric vehicles.
Last but not least, Ukraine produces nearly 70% of the world’s neon gas needed for components such as microchips, which are already in short supply.
More: How are the sales of electric cars going in Bulgaria?
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