Korean used-car prices continue to fall even in low value segment

[Photo by Lee Chung-woo]

Prices of used cars in South Korea extend the losing streak after they hit record highs in the past two years when global car production was marred by chip shortages and supply chain bottlenecks.

According to Korea’s top used car retailer K Car Co. on Wednesday, overall prices of used cars fell in January based on an analysis of 740 domestic and import car models launched no more than 12 years ago. The price of second-hand cars costing in the 10 million won ($7,866) range in particular fell by an average of 10 percent.

The cars in the low-end price group are considered the best bang for the bucks in the used car market as they are sold at more than half the price of their new versions, allowing buyers to benefit high performance at low cost. Thus, this is the segment that experience less price fluctuation during a downturn compared with those in the luxury segment.

The price fall in money-for-value models comes after second-hand models in the luxury, large-size segment started plunging early last year.

Demand for used cars has declined as consumers tighten their belts due to high interest rates, high prices, and a fall in asset value.

The prices of well-sought models in the 10 million won range fell in January from a month earlier, like SsangYong Torres, a mid-size crossover sport utility vehicle that fell 10 percent, BMW iX 15 percent, and Chevrolet Bolt EV 8.9 percent.

The average price of about 80 percent of the studied models fell in January from a month ago while the remaining remained flat. No models saw their prices up in January.