Second Hand Car Costs In Los

[daiwill60]

Can anyone out there rationally explain to me why the cost of Second hand cars is so high in Thailand ( Mahasarakham at least ), some of those I see for slae for the prices being asked , would make Arfur Daley turn in his grave, god bless him .

I thought it may be a farang pricing thing, but the wife confirms to me that it is not, the price is high for all.

After all, the condition of many of these vehicles, no where near warrants the second hand price being only a fraction less than buying a new vehicle in many cases. Very often when the cost is more reasonable and affordable the car is a complete 'shed' of a vehicle that barely looks as is if it would make it to the end of the driveway.

New cars are generally cheaper to buy in Thailand than in the UK.

So why is it, that second hand cars are so bloody expensive, compared to the UK, I looked the other day at a 13 yr old Honda Civic, that had been around the clock at least once, it had also been in the hands of a boy racer, ( lowered suspension, throaty sounding exhaust, lots of little cheap looking mods / bodges / repairs to electrics in engine compartment etc etc) and they wanted 175,000 bht ( nearly £3,500 for a shed, that would have been about 25,000 - 40,000 bht or £500- 800 in the UK, tops?

Are SH cars significantly much cheaper to buy down south near Bkk? ( suppose they well may be in the very near future, following recent events).

Why are SH cars so expensive in the poorest region of Thailand?

Will we now see a glut of very cheap water damaged Hondas on the market very soon?

If the Govt was offering money back on new cars, ( I think they may renage on this one following the cost of flooding) would the cost of SH cars have been expected to come down drastically?

Edited October 30, 2011 by daiwill60

[mca]

My theory is it's to do with the car finance market. Not that many folks around my way can afford to pay cash for a car but can just about afford the repayments on a second hand one so it keeps the 2nd hand market artificially high to rake in the repayments.

Of course my theory could be just so much <deleted>.

[richard_smith237]

The new prices are more than the UK...

Eg a new Jazz in Thailand is about THB 6-700 k / £12,500 to £14,500

That's significantly more than the UK Price.

It's all related to the taxation of the new cars.

[steve187]

buy new and get a good deal, is the best way

they charge a lot here for second hand because they can.

[Heng]

Market forces. Like the cost of anything else. The terms 'artificial' or 'inflated' or 'underpriced' don't really apply when the same trends have held true for 30-40+ years. There are all types here and not just a few of each.... I have a neighbor who owns roughly 10-12 buildings on the street near us whose main form of transportation is her bicycle.... she routinely throws out 'new' unopened food because she says it's too close to the expiration date.... and there are trash scavengers (some who apparently own motorcycles who on the surface might seem better off than the bicycle lady...) who regularly recover this stuff from her trash can.

[kevkev1888]

Second hand cars in the UK are probably the cheapest in the world.

The cost of repairs/servicing is so high old cars are worth nothing.

The opposite is true here

[kartman]

Leasing killed the mid / lower end values in UK about 15 +years ago + UK S/H buyers won't pay a proportion of any newcar tax / VAT lost by first owner (vat recovered then payed at lower amount when sold s/h if registered) .Here taxes are not seperated so you always pay proportion of total new cost ,keeps people able to make the jump to new vehicle when required and the auto industry rolling. You have to forget the UK as that market is not coming here just treat the Thailand vehicle industry as a club, your first purchase includes the joining fee then its not as painful as your' locked in'

[culicine]

buy new and get a good deal, is the best way

they charge a lot here for second hand because they can.

They charge a lot because cars are still considered 'luxury' items, unlike the west where its a given you will eventually buy a car. Most of the 15 y.o hondas/toyotas are rubbish (some still holding close to 50% of their purchase price. It's nuts. Spend a little more and buy new if you can. The interest rates on near new second hand cars will kill you.

[kenny999]

buy new and get a good deal, is the best way

they charge a lot here for second hand because they can.

They charge a lot because cars are still considered 'luxury' items, unlike the west where its a given you will eventually buy a car. Most of the 15 y.o hondas/toyotas are rubbish (some still holding close to 50% of their purchase price. It's nuts. Spend a little more and buy new if you can. The interest rates on near new second hand cars will kill you.

Not some thing to complain about especially when you can sell a 6 month old Mazda 2 sedan for the same money as it was bought for!!!

[connda]

Sold my 2002 Honda Accord in the US for about $7000. Could have got double that here in the LOS. However: Buyer Beware!!!

With second hand vehicles If anyone has bought a new car on credit, they are going to have to keep full coverage on that vehicle (at least in the US, and I'd expect that Thai bank loan requirement would be no different). If you total the car, the insurance company pays off your loan and then "junks" that vehicle as "salvage" on the second-hand market.

Now I think everyone has noticed a little flooding in Thailand lately. If a new vehicle is flooded, it's worthless -- electrical, mechanical, everything gets messed up and the vehicle will never run well again. Insurance companies will write off these vehicles and sell them for "salvage" on the second-hand market. In the US the car title is clearly listed as "Salvaged". But I'm not sure how it's handled here in Thailand. But as a buyer, I'd be very wary of buying any vehicle on the second-hand market. You're setting yourself up to buy a very expensive lemon on wheels. I think for the next year or so, I'd even be suspicious of buying a new car. Look how many car factories got flooded out. If they put a flood-damaged new car on the market, even with a warranty, the vehicle is going to spend a lot of time in the shop being repaired.

Caveat emptor!!! Good luck.

Edited October 30, 2011 by connda

[MoonRiverOasis]

The primary factor is accessibility - new cars typically require a 25% downpayment for a first car buyer (up to 40% if buying a 4WD), at least 6 months banking history, a absolutely clean credit history, and more often than not a guarantor that could also qualify for the finance.

Used cars can be bought in many cases for as little as 20,000 Baht down, with far less demanding finance qualifications, high-risk credit options for those with a tainted credit history and/or poor/non-existant income history.

Even though a Thai buyer might be able to make the repayments on a new car, it's the 125K+ downpayment, or the fact that their income is undocumented, or they can't find a guarantor, or they've had bad finance before that keeps them out of the new car market.

The other major factor is availability - cars that are popular for first car buyers routinely have waiting times of several months. So impatience and/or an immediate need for transport pushes a lot of buyers into the used market for nothing other than the fact that they can't wait.

The end result is high used car demand - and just like any other market in the world, the price simply reflects what people are willing pay...

Edited October 30, 2011 by MoonRiverOasis

[MoonRiverOasis]

I think for the next year or so, I'd even be suspicious of buying a new car.  Look how many car factories got flooded out.

Only one factory got flooded - Honda. And no way will those cars be sold as new..

[connda]

<br>

<br>I think for the next year or so, I'd even be suspicious of buying a new car.&nbsp; Look how many car factories got flooded out.<br>

<br><br>Only one factory got flooded - Honda. And no way will those cars be sold as new..<br>

I hope so, but......

...and then there are all the cars that are on the Dealership's lots. Although dealers don't seem to keep as many cars in inventory as they do in the US. But, if the dealership has been flooded, what are they going to do with those flooded new cars??? Heck, I don't trust car dealers in America -- why trust them in Thailand?

I guess I've lived here too long LOL

Edited October 30, 2011 by connda

[connda]

The primary factor is accessibility - new cars typically require a 25% downpayment for a first car buyer (up to 40% if buying a 4WD), at least 6 months banking history, a absolutely clean credit history, and more often than not a guarantor that could also qualify for the finance.

Used cars can be bought in many cases for as little as 20,000 Baht down, with far less demanding finance qualifications, high-risk credit options for those with a tainted credit history and/or poor/non-existant income history.

Even though a Thai buyer might be able to make the repayments on a new car, it's the 125K+ downpayment, or the fact that their income is undocumented, or they can't find a guarantor, or they've had bad finance before that keeps them out of the new car market.

The other major factor is availability - cars that are popular for first car buyers routinely have waiting times of several months. So impatience and/or an immediate need for transport pushes a lot of buyers into the used market for nothing other than the fact that they can't wait.

The end result is high used car demand - and just like any other market in the world, the price simply reflects what people are willing pay...

+1 Nice assessment.

[MoonRiverOasis]

I should also add that finance on new cars is even tougher now, with the first car buyer's scheme running.

Most lenders are now also looking for additional collaterol (land, houses) as a qualification for those without an established credit history (which would be most first car buyers). So new cars are even less accessible than ever..

[Eff1n2ret]

The insurance companies don't seem to take the same view of second-hand values. I changed my insurer after the first year (which was free with the original purchase) because they wrote down the value so much. Now the renewal is approaching, and the quoted devaluation is nearly 15% on the last year, and 20% on the new price 2 years ago. The vehicle has been regularly serviced and is in good condition. I've queried it and am awaiting a reply. Am I being unrealistic?

[sotsira]

The insurance companies don't seem to take the same view of second-hand values. I changed my insurer after the first year (which was free with the original purchase) because they wrote down the value so much. Now the renewal is approaching, and the quoted devaluation is nearly 15% on the last year, and 20% on the new price 2 years ago. The vehicle has been regularly serviced and is in good condition. I've queried it and am awaiting a reply. Am I being unrealistic?

20% depreciation in two years sounds about right to me.

[edwinchester]

A few years ago one of our neighbours was trying to sell his Toyota Soluna for FOUR years. The price actually went up from 180k to 220 over that time. When I asked him about the last price hike he mentioned that the new Vios had gone up in price hence him asking more!

[MoonRiverOasis]

The insurance companies don't seem to take the same view of second-hand values. I changed my insurer after the first year (which was free with the original purchase) because they wrote down the value so much. Now the renewal is approaching, and the quoted devaluation is nearly 15% on the last year, and 20% on the new price 2 years ago. The vehicle has been regularly serviced and is in good condition. I've queried it and am awaiting a reply. Am I being unrealistic?

Insurance only covers 80% of the vehicle replacement value in Thailand - presumably to deter any thoughts of fraud.

A few years ago one of our neighbours was trying to sell his Toyota Soluna for FOUR years. The price actually went up from 180k to 220 over that time. When I asked him about the last price hike he mentioned that the new Vios had gone up in price hence him asking more!

That's correct - the used value is proportional the the current replacement value, to a degree, and providing you're valuing a current shape.

This doesn't usually apply across model changes though - the original Soluna is an exceptional car for resale value though, as the excise tax changes in 2004 altered the ballgame - your friend's one is probably still worth 220K now

[Heng]

Now I think everyone has noticed a little flooding in Thailand lately. If a new vehicle is flooded, it's worthless -- electrical, mechanical, everything gets messed up and the vehicle will never run well again. Insurance companies will write off these vehicles and sell them for "salvage" on the second-hand market.

Garage/bodyshops are going to be making a killing this year (on top of what is typically a very good business model.... more and more cars on the roads, way too many people ignoring traffic laws, being in bed with a dozen insurance companies, leave the rest up to chaos and probability) with the number of damaged cars out there.

[MJCM]

Insurance only covers 80% of the vehicle replacement value in Thailand - presumably to deter any thoughts of fraud.

Yeah, I was wondering why they only covered 80%. To deter fraud sounds very logical.

[garyk]

I ran across the same thing when I first decided I wanted transportation here other than a motorcycle. I ended up spending about 6-8 months just learning enough thai and getting the paperwork ready where i could bid on an auction vehicle. I made a choice to buy the newest as possible one year or less with the lowest miles. I ended up with a Ford ranger and until a couple months ago was perfect at 99000 KM. Now having brake problems but the local ford dealer is fixing that now I hope. Just a thought but if good cheap transportation is what you are after it is worth spending a little time and research. Mine was 6 months old. 22000 KM paid 345,000. And is the toughest truck I have ever owned. I really abuse it and it is just as tight as when i bought it. Amazing quality.

Another thing is with insurance. If you buy it cheap enough the 80% will easily cover my cost in the pickup I bought at an auction. It has been a win win situation for me. I personally have the money to buy new. But after seeing the roads and the way I wanted to drive. I decided to go another way.

After the floods here I would research the effects and look very closely at used cars here. Not exactly what I would want to do. But doable.

Edited October 30, 2011 by garyk

[just_another_guy]

Many good points made with the above posts.

Personally I agree that the prices of second hand vehicles are high, but the repair costs are quite cheap for popular makes and models of vehicles here in Thailand.

Maybe that is a factor in the price of used vehicles.

For example, I own an old truck with an unknown amount of kilos (speedo stopped working at 350,000 kilometers)and I had a U-joint replaced on it, including the service call in the middle of nowhere--labor and the actual part for 200 baht.

A year later the starter was replaced (removed/repaired/replaced) for 1,000 baht.

And another year later the upper ball joints replaced including a front end alignment for 1,500 baht.

So it seems to me labor is cheap and parts are cheap---but who knows what quality of labor and parts are.

One advantage of a new vehicle is you have peace of mind knowing you can drive from A to B and back to A without a break down.

Disclamer: These are Issan prices---not sure what they would be in the tourist areas.

Cheers...

Edited October 30, 2011 by just_another_guy

[Heng]

Insurance only covers 80% of the vehicle replacement value in Thailand - presumably to deter any thoughts of fraud.

Yeah, I was wondering why they only covered 80%. To deter fraud sounds very logical.

That and they don't feel obliged to insure the dealer's original profit margin.