Rise of the Blue Dollar: What Happens to Used Car Prices

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The value of the blue dollar has skyrocketed and with that the entire economy is on high alert. The car market is no exception, especially since it is generally closely linked to the price of the US currency.

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For the past few days, several used car dealers have been talking about a block in sales due to the uncertainty caused by the rise in the dollar and its possible impact on prices. However, since Automotive Chamber of Commerce (CCA) ensure that the sector’s problem is the same one that has been dragging on for years.

“Used price is more referred to in each circumstance based on available stock,” he said clarion Alberto Príncipe, president of the CCA, who elaborated on the concept: “I am not saying that the dollar does not influence the thinking of those who set the prices, but it is not the determining factor”.

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The prices of the best-selling used cars have increased by 6% in the last two months.

The sale of used cars in Argentina had marked an increase in March reaching 146,826 used vehicle transfers, both on an annual basis (4.7%) and compared to the previous month (31.6%). The first quarter of the year also recorded an evolution of 3.1%.

rising prices

In addition to the uncertainty generated by the increase in the value of the blue dollar, the price of a used car is affected by other factors that are very important today. Príncipe explained that today marks sustained demand in the face of low stock: “prices will definitely go up“.

“If there’s replacement vehicles, more or less of the same value and same mileage and model, they (the agencies) sell. And if not, they’re waiting like the rest of the commercial sectors, where if there’s no replacement they have the goods withheld” expanded camera holder.

Merchants with few requests in the last few days.

Merchants with few requests in the last few days.

And he was a little more explicit: “That’s right, but it’s not speculation, just the need to maintain capital. For us, capital is not dollars, it’s not pesos. For us, capital is the number of cars of the same quality and type that we have in stock. If we can restock something while selling it, we sell it.. If not, we will wait to see how this situation is resolved.”

Reality shows that used cars have shown sustained increases for several months. For reference, models such as the Volkswagen Gol Trend, the Fiat Cronos or the Toyota Hilux have seen average increases of 6% over the past two months, which can be 8% for a Ford EcoSport.

The usual claims

“From the chamber, our claims are the eternal ones”, Príncipe complained and listed: “better funding, if there was or could be, and increased ability to import vehicles to augment existing stocks. This would create the natural evolution of this business, which when selling at km 0 means taking, in 90% of cases, used cars and this in turn is recycled and so on”.

The Speaker of the Chamber reported that “in recent years we have lost a lot of stocks because production for the domestic market has decreased. In 2013 we reached almost one million vehicles and today we are at 400, 450,000 vehicles a year. This it means that the country’s overall used-car share has dropped significantly.

For Príncipe “this has been happening for 8 or 9 years and the deterioration in the number of cars offered is serious. We cannot ask for a normalization of the market, this will happen in all sectors, not just ours”.

The head of the institution considered that “the market in general will not change muchNot because of the rising dollar, not just because of inflation. These adjustments are made based on internal expenses external to the vehicle itself, such as tax increases, rents, administrative overheads, so car prices rise to support the business.

Source: Clarin

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