WHY ARE USED CARS SO EXPENSIVE IN THAILAND?

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Hornet6
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WHY ARE USED CARS SO EXPENSIVE IN THAILAND?

Post by Hornet6 » January 27, 2015, 6:25 pm

Can anyone shed light on why used cars say 1~3 years old so expensive?
A typical reasonable Honda/Toyota?Ford/VW/used car 1~3 years old in Europe will be worth between 20%~40% of the original sales price when new.
YEAR 1 - 20~25% depreciation
YEAR 2 - 30~35% "
YEAR 3 - 35~40% "
In Thailand the prices appear to be way too high in value, any logic behind this??



mickojak
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WHY ARE USED CARS SO EXPENSIVE IN THAILAND?

Post by mickojak » January 28, 2015, 8:32 am

After struggling with this fact myself and eventually buying a new car, I have come to the conclusion that the vast majority of people in thailand (locals) who buy cars, do it on credit. I think there is just heaps of people who can't borrow enough for a new car but will borrow as much as they can to get the newest car for status, which means that every 10,00Bht price level is just un-obtainable for many.
Because status is more important than common sense, there are many willing to pay too much for their status!!!
I wonder what other members make of this?
Mick

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Macca
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WHY ARE USED CARS SO EXPENSIVE IN THAILAND?

Post by Macca » January 28, 2015, 9:24 am

I'm sure you'll get a lot more feedback if you moved this out of classifieds and on to the forum.

In the meantime here's a couple of links to look at
http://www.thaivisa.com/forum/topic/253 ... expensive/
https://uk.answers.yahoo.com/question/i ... 746AAMFx6N

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WHY ARE USED CARS SO EXPENSIVE IN THAILAND?

Post by Jing Jing » January 28, 2015, 11:44 am

The Thai car market is not mature. The car markets in Europe and the US are mature. The number of cars in these countries is pretty much set. Many adult Thais only buy there first car after many years of riding a motorcycle. The number of cars has increased every year in Thailand. Also the recent Thai government eco car program only served to reinforce the buy new mentality.

The used car market likewise is not mature and lacks sophistication. There are no buying guides and advertising is weak.

My wife's nephew and niece M6 students were given new cars by their parents, so they have little appreciation for the expense or value of the car.

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WHY ARE USED CARS SO EXPENSIVE IN THAILAND?

Post by RLTrader » January 28, 2015, 12:08 pm

and I've been told that the Used Car market here in Thailand is over stocked and that's why prices have tumbled in the past year or two. Whatever. :D

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WHY ARE USED CARS SO EXPENSIVE IN THAILAND?

Post by Barney » January 28, 2015, 1:20 pm

Go up to the auction yard on the ring road just before the airport turnoff next time they are on. You can get a price sheet day before.
Don't know the used car market prices in the region but when I went for a gander quite a few seemed very reasonable.

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WHY ARE USED CARS SO EXPENSIVE IN THAILAND?

Post by rct » January 28, 2015, 3:09 pm

New cars in Thailand have a high tax, so they are more expensive than in much of the west. Luxury cars even more.

Here is what I believe: the high tax on cars in Thailand is similar to the C.O.E on cars in Singapore, Certificate of Entitlement, which is basically a tax on car ownership. Singapore's C.O.E is good for ten years, it's value going down more or less 10% per year by logic, though in fact the price of a new C.O.E. depends on supply and demand too. But once owned, amortize it over ten years with the car. Then export the car, or buy a new 10 year C.O.E for the old car in the case of Singapore.

In Thailand the tax paid on the new car is good for the life of the car. When you sell your car in the second hand market, you also recover some of the tax paid, as the new buyer will end up paying you for the used car plus some of the tax paid, even though he pays a lump sum and the tax is not priced out separately.

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WHY ARE USED CARS SO EXPENSIVE IN THAILAND?

Post by Bonanza » January 28, 2015, 3:40 pm

As 'Jing' says, the car market is not mature. There is also a very high import tax on foreign vehicles (depends upon many factors but all in excess of 320% of CIF value), which is why Thailand is a restricted market. Hence those wealthy Thais who imported vehicles a few years ago don't want to see the value reduced.

Additionally, you can buy a three or four year old car in Japan for about 25% of new price - imagine what would happen if these were imported en mass - it would kill the Thai market. Ditto cheap second hand cars from UK.

Ideally, the import duty would be gradually reduced say by 25% per year so that it becomes near zero in about 12 years time. At the same time, the number of secondhand cars available will have greatly increased during the same period, creating a 'mature' market.

Are those cars currently for sale the result of the owners trading up for newer models, or because they have been repossessed do to inability to keep up payment? I suspect a lot are the latter, so there is still a lot of baht to recover.

Whatever, in most cases you might as well buy new.

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WHY ARE USED CARS SO EXPENSIVE IN THAILAND?

Post by macca46 » January 28, 2015, 8:14 pm

Second hand cars and pick up's are so over priced in the market here in UT it is a joke 12 months ago when I arrived to live here full time I looked in small and big car yards and there prices where way off the scale.

Pick up's in particular are probably the biggest seller and as I found out a 5-6 year old pick was nearly as much as a new one.

Why? I do not know.

i was in the retail motor industry in Aus. for 34 years and had my my own second hand car yards and to be competitive you had to be price well below new car price.

I bought a new Hi Lux pick up because it was the best value for money.

Big second hand car yard heading to Nong Khai between Home Hub and Do Home 2 weeks ago fully stocked now deserted and empty.

Maybe to many greedy dealers???

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WHY ARE USED CARS SO EXPENSIVE IN THAILAND?

Post by wiking » January 28, 2015, 11:09 pm

secondhand cars is fallen a lot the last - therefore many off the car dealers are gone bankrupt - a lot has change since after the flooding time, where people could not buy a new and on this time, secondhand was near new, but these time is gone.

we has now 3 auction place in udon and there is 5 Auction every month - about 1500 cars and pickup
many time they cant get the minium bid price.

stay away from the thais favorite and you get them for nothing

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WHY ARE USED CARS SO EXPENSIVE IN THAILAND?

Post by Hornet6 » January 29, 2015, 2:03 am

Hi guys many thanks for all your replies
I guess I will buy new as I understand
That Thais are expert cut & shut merchants
Nissan Livina looks a good spec/price
Anyone have any experience of this model?
Current top of the range 734,000baht

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WHY ARE USED CARS SO EXPENSIVE IN THAILAND?

Post by patriot » January 29, 2015, 12:38 pm

Hornet,
I recently considered selling my two year old, one owner, vgc, Honda CRV.
Original PP was 1,550,000 Baht appx.
A dealer, who happens to be a friend of a friend would only offer 850,000 and the Honda dealer would only offer 880,000.
If I were to try and purchase the same car from the dealer the following day it would be up near the 1.2 million mark.
In answer to your original question - the second hand dealers make an absolute freaking fortune, playing on the notion that a buyer is purchasing a "nearly new" vehicle for, maybe, 300,000 baht less.
Buy new, unless you're going for a car of 5+ years ... but even then there is no guarantee on the chassis strength or engine reliability

CC

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WHY ARE USED CARS SO EXPENSIVE IN THAILAND?

Post by old-timer » January 29, 2015, 2:26 pm

patriot wrote: Buy new, unless you're going for a car of 5+ years ... but even then there is no guarantee on the chassis strength or engine reliability CC
Agreed,
When it came to selling a five year old Toyota Vigo 4x4 I had bought from new I lost around 25% of the purchase price which I thought was an unbelievable deal although the vehicle was in excellent shape.
What with the GBP / THB exchange rates it turned out that I actually lost hardly a penny on the brand new price I paid, but that's a different story.
Buy new, you won't regret it.

OT........ \:D/

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WHY ARE USED CARS SO EXPENSIVE IN THAILAND?

Post by BossHogg69 » January 29, 2015, 6:07 pm

Hornet6 wrote:Hi guys many thanks for all your replies
I guess I will buy new as I understand
That Thais are expert cut & shut merchants
Nissan Livina looks a good spec/price
Anyone have any experience of this model?
Current top of the range 734,000baht
Nissan and Ford are not good buys as they depreciate lick a brick, buy Toyota, Mitsubishi for good resale values.

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fatbob
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WHY ARE USED CARS SO EXPENSIVE IN THAILAND?

Post by fatbob » January 29, 2015, 6:11 pm

Have a look at the new Mazda 2, very impressive, comes in diesel also, base model about 665k.

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WHY ARE USED CARS SO EXPENSIVE IN THAILAND?

Post by thaiguzzi » January 30, 2015, 11:10 am

Disagree. We purchased our Toyota Vigo 4 door manual Prerunner from an Udon dealer with 11k on the clock and 9 months old for 560k. New price back then was about 790k. This was 7-8 years ago. There were, and still are deals to be had on one year vehicles especially trucks.

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WHY ARE USED CARS SO EXPENSIVE IN THAILAND?

Post by rjj04 » January 30, 2015, 12:26 pm

Perhaps I am missing something but, isn't the maintenance cost part of the issue? I mean, in the USA a dealership in a metropolitan area is going to charge you $50/hour for a mechanic, and what is it here, $5/hr? So perhaps it is more of a case that maintenance costs in the developed world are far higher, so you have a more rapid drop-off in price as a car ages? At 5-6 years out you are looing at brake jobs, clutch jobs, etc!

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WHY ARE USED CARS SO EXPENSIVE IN THAILAND?

Post by rick » January 30, 2015, 8:25 pm

Yes, maintenance has a bit to do with it. I know quite a few people with cars around 10 years old but still in good condition - and it is amazing that some 20 year old cars are still looking good. You can afford to patch and repair for far longer in Thailand. So if you consider 15 years as a realistic life expectancy, depreciation of under 10% a year is understandable.

I would like to know where you can get a 3 year old car in Europe for 20% of the price .... maybe at an auction but a realistic BUYING price rather than 'value' is more like 50% or more.

Now that there are new Ecocars available in Thailand for substantially less than many new cars, due to lower taxes, it should help on the downward pressure on secondhand car prices.

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WHY ARE USED CARS SO EXPENSIVE IN THAILAND?

Post by socksy » January 31, 2015, 7:25 am

"I would like to know where you can get a 3 year old car in Europe for 20% of the price .... maybe at an auction but a realistic BUYING price rather than 'value' is more like 50% or more".

I have personally visited this place in London and their prices are very competitive.

https://www.google.co.th/url?sa=t&rct=j ... bm_OvphDQg
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WHY ARE USED CARS SO EXPENSIVE IN THAILAND?

Post by tamada » February 16, 2015, 5:08 pm

The second-hand car market has boomed since the 'first time buyer rebate' debacle caused thousands of locals to buy cars that they realy still couldn't afford (the monthly payments were still the same regardless of the rebate). Hence the flourishing second-hand 'tent' market full of repossessed 1, 2 and 3 year-old, low-mileage cars selling for quite silly prices. These dealers are not interested in anything much older than 4 years old either due to the 'fresher' stock that they are making a mint on. For years, a car would hold an unrealistically high resale value (not be confused with realistic low depreciation value) but that is no longer the case.

If you look at the 'price check' feature on taladrod.com you will see the prices that the private seller are dreaming of, ie. has no hope in hell of getting. Case in point; Mrs tam just sold her mint condition 2008 Honda CR-V 2.4 EL for 390k baht (around 1.12 million baht new on-the-road). She reckoned if she got 400 k baht, she would be very lucky. Similar sellers are asking upwards of 550k on the web... they better not be holding their breath. I may have got about 400k baht for my 3 year-old Ranger 2.2 XLT (800 k baht new on-the-road) whereas some owners reckon it is also worth upwards of 150k baht more. Not a hope unless doing a private sale with someone you know.

The upside of the end of the rebate scheme is the dealerships are now more willing to work for a sale (commission) and if you are buying new, there's some excellent deals to be had right now and more likelihood of getting freebies or heavily discounted add-on packages.

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