Low-mileage used cars are increasingly preferred when planning a car purchase.
More than 70% of Estonian people have had the experience that when buying a low-mileage car straight from the owner, its actual value turns out to be lower than the paid price. The market of used cars has expanded over the past years with inflation also raising used car prices, so increased attention is paid to the risks relate to buying a car straight from its previous owner or from a car sales lot.
According to Izīda Gerkena, COO of Moller Auto Baltic, the sales of used cars has soared over the past two years. “The general trend in Estonia as well as in neighbouring Latvia and Lithuania indicates that when planning a car purchase, people tend to prefer low-mileage used cars. They are much cheaper compared to new cars; however, the technical condition of a car that has only been driven a few years is quite comparable to that of a new vehicle,” she explains.
However, a survey executed by Norstat indicates that buying a car straight from the owner or from a used car lot comes with several risks. When buying from a private person, the buyer is often disappointed when the technical condition of the vehicle turns out to be worse than it originally appeared. More than 70 percent of the survey participants indicated that the main risk was the disappointment in the actual condition of the car in comparison with what was assumed during the purchase. The complexity of the transaction, disappointment in the transaction amount and the possibility that the car might not be immediately ready for use were listed as other risks.
The procedures related to car purchase and re-registration were generally assessed as simple as fast by Estonians. Not many people saw the transaction procedure as complex. Respondents of other nationalities considered the procedure of buying a car straight from the owner and re-registering the vehicle more complicated. Almost a quarter of respondents from other nationalities who considered the transaction procedure complicated had experienced difficulties during the purchase process.
One fifth of Estonians who had bought a used car straight from the owner or from a car sales lot were disappointed in the transaction amount. The transaction amount was of most concern to those who were currently unemployed.
According to Gerkena, a good price is the main reason to prefer a used car and all the aforementioned risks can be prevented by buying the car from a certified dealer. “Although the prices of used cars have increased during the recent years due to higher demand and the inflation, for many people, a low-mileage used car still remains the most optimal option to purchase a vehicle in a good technical condition with a reasonable price,” she explains.
The survey indicates that a third of Estonian people consider 5000 euros as a sufficient price for a low-mileage used car while another third is willing to pay up to 10 000 euros for a low-mileage car. 12% of Estonians would be ready to spend more than 15 000 euros on a used car. In general, men are willing to pay more for a low-mileage used car than women. Retired people and students would generally not spend over 5000 euros on a used car. Big families are willing to spend up to 10 000 euros on a low-mileage car in good technical condition.
The survey was conducted in June by Norstat in all three Baltic states. In Estonia, there were 1303 respondents aged 18–74 years.