AS we approach the end of the year, the automotive market is experiencing a notable shift, with used car dealers offering enticing discounts on vehicles. This trend is driven by the anticipation of rising car prices in the coming year, which is creating a win-win situation for both buyers and sellers in the used car market.
According to The Star, used car prices are expected to drop by 10% to 15% during this period, making it an excellent time for those in the market for a pre-owned vehicle. However, sellers should be prepared for potential losses of a similar percentage when parting with their vehicles. This fluctuation benefits both sides of the transaction, as buyers can capitalise on these year-end discounts, and manufacturers eager to clear old stock are often willing to lower prices for new vehicles.
One intriguing aspect of this trend is the popularity of certain car brands and models in the used car market. Perodua, known for its low depreciation rate, has gained significant traction, with the Perodua Myvi being a standout choice among buyers. In contrast, the demand for Proton models is relatively lower, highlighting the preferences of used car buyers in the region.
The used car market, however, is still in the process of recovery from the impact of the pandemic. Sales have plummeted, with dealers struggling to maintain previous sales volumes. In the past, selling around 100 cars per month was typical, but today, selling 15 cars in a month is considered satisfactory. Some dealers have even resorted to selling at a loss to prevent inventory from depreciating further.
While year-end promotions and substantial discounts are enticing buyers for vehicles produced in 2023, used cars, already having experienced depreciation, are less likely to benefit from these promotions. New cars, on the other hand, are receiving discounts of up to 10%, making them a tempting option for buyers looking to acquire a brand new vehicle at a lower cost.
However, it’s crucial for customers to consider their specific needs when contemplating a vehicle purchase. Even with discounts, new cars can remain relatively expensive compared to used cars, which offer a cost-effective alternative.
Interestingly, not all used car dealers are following the trend of offering discounted prices to clear inventory. Some have chosen to maintain slightly discounted prices that they’ve offered throughout the year. These discounts typically range from less than RM1,000 to RM4,000, depending on factors like the car model and other variables. It’s worth noting that these trends may vary from region to region and dealership to dealership.
The year-end discounts on used cars highlight the ever-evolving dynamics of the automotive market, influenced by shifting buyer preferences, market recovery, and the desire to capitalise on year-end promotions. This presents a unique opportunity for both sellers and buyers to make the most of the current market conditions.