Due to High Oil Prices and Economic Recession Concerns... Interest in Used Cars Cools Down

Price Decline for Three Consecutive Months Since May
Sportage Diesel Drops Nearly 2 Million Won Compared to February
Uncommon Downtrend During Vacation Season

Used Car Export Complex in Songdo Recreation Area, Yeonsu-gu, Incheon City

[Asia Economy Reporter Choi Dae-yeol] The decline in used car prices has become more pronounced. This is attributed to a decrease in demand as consumer sentiment has weakened due to high oil prices and concerns over an economic downturn. The soaring prices, driven by increased demand for used cars amid prolonged new car delivery delays, have also played a role.

According to Kaizyou Data Research Institute on the 7th, the number of used car registrations in the first half of this year was 1,935,329 units, down 4.2% compared to the same period last year. While used car prices had been soaring until early this year, they have been declining for three consecutive months from May to this month.

Comparing the prices listed on the used car platform Encar.com with those at the beginning of the year, the Sonata gasoline model's higher-priced listings dropped by about 1.25 million KRW to approximately 20.41 million KRW compared to six months ago. This model had seen steady demand and price increases until early this year.

The Kia Sports Utility Vehicle (SUV) Sportage diesel model is priced around 24.53 million KRW, nearly 2 million KRW lower than in February (26.38 million KRW). Among imported cars, price declines are particularly noticeable in popular sedans in the used car market. Some listings for models like the Mercedes-Benz C-Class and Audi A6 have dropped by more than 3 million KRW.

Typically, the summer vacation season is a period when used car demand increases, causing prices to rise or decline less sharply, so the recent downward trend is considered unusual by the industry. The weakening consumer sentiment is attributed to the heavy burden of fuel costs and worsened car purchasing conditions due to interest rate hikes. Except for some eco-friendly vehicles with good fuel efficiency or low maintenance costs, most vehicle prices have fallen for the same reasons.

The simultaneous spread of high inflation and economic recession concerns has also affected the asset markets such as stocks and real estate, causing them to contract. With assets shrinking immediately and economic conditions becoming uncertain in the second half of this year and beyond, many consumers have tightened their wallets. The prolonged new car delivery delays, sometimes exceeding a year, which caused used car prices to soar, are also cited as factors deterring prospective buyers. For some popular models, prices barely dropped or even sold at a premium several months after new car delivery.

A representative from the used car industry said, "The depreciation rate of prices for both domestic and imported cars has increased compared to last month," adding, "Although used car demand usually rises ahead of the summer vacation, the combination of rising used car prices and soaring oil prices seems to have dampened consumer sentiment."