Consumers opt for used cars in wake of price increases

Consumers are opting to buy used cars in the wake of the unprecedented increase in the price of new, unused models, which now cost a minimum of SR 60,000.
As a result, the used car market has witnessed a high turnout of customers. Consequently, a number of companies have begun opening exhibitions of used cars in a bid to attract customers who cannot afford new cars to their liking.
Several factors have contributed to the rise in prices according to experts in the automobile industry. These include rising fuel prices, the use of highly advanced technology in manufacturing vehicles and the increase of accessories and extra fittings for premium quality in newer models.
“Prices have reached unreasonable levels. Consumers who earn little more than SR 6,000 per month and have several financial obligations simply cannot afford to buy an unused vehicle. They therefore opt for used cars but often ask for rigorous checks to be conducted on the safety and maintenance of used cars,” Salah Al-Shaalan, a supervisor at a used cars exhibition, told Arab News.
Nevertheless, used car owners acknowledge that their second-hand purchase may not last for longer than three or four years and are fully aware that they will spend more money fixing it.
“I have paid SR 30,000 to buy a used Japanese car, but I have spent an additional SR 10,000 fixing and maintaining it,” Tareq Ismaeel, a Sudanese resident working in the private sector, told Arab News.
Faisal Abu Shousha, head of the National Committee for Automobile Agents at the Council of Saudi Chambers of Commerce and Industry, earlier stated that, “The variation in the value of major currencies plays a major role in determining prices of vehicles. The appreciation of the US dollar and the Japanese yen has resulted in a rise in prices of vehicles made in the United States and Japan. Similarly, the depreciation of the euro has affected the prices of vehicles made in Europe.”
A steady increase in the price of vehicles in the local market has forced several customers, especially youth, to purchase cars in installments. Abdul Aziz Naeem, a Saudi employee who is working in the private sector, told Arab News, “I have one option to own a car that is through monthly installments, which consume a major chunk of my salary.”
“It is hard to choose between purchasing a new car and used one. After all, cars are essential for transportation in the Kingdom in the absence of other modes of transportation. Newer car models are extremely expensive. At the same time, used cars require a lot more money than they are worth,” Naeem added.