What are your views on the 2nd hand car market?

[Spitfire]

I would like this to be an open thread about what you think, from the ridiculous to the reality of the situation, or whatever.

I sure most of us are familiar with the small difference in monetary terms between buying new and buying newly new second hand.

However, what are the pit-falls of accepting a second hand car/pickup here instead of buying new?

I have often thought of buying a second hand luxury car like a Benz etc or sometime similar that will hold it's value generally and lose little over 5 years, but worry about the arse falling-out of the second hand market at some point and everything that is related to that eventuality....any general thoughts on that one folks?

Is this market destined to be like it is now for a long while or are there problems that folks see in the future?

Perhaps, a better question is "Why is it like this in the first place?"

It really all defies reasonable explanation really and any decent explanations are welcome folks.

Sometimes, I'm shocked that a second hand pickup can command 75-80% of it's new price that has done 100Km and is 5 years old plus has probably been thrashed to 'kingdom-come' by previous market owner.

I never really understand why these garages don't just discount a bit to shift the stock....seem strange that the are so unwilling to do this to shift stuff.

I am, of course, open to suggestions of what the answer might be despite these forecourts everywhere being brimming full along the sides of every major road.

[Lung Per]

It's the same with the room rates in guest houses. They always seem to stick to the list price even when there is far between customers.
In both cases it could be the old Thai a question about losing face; Once they have deceided on a price they feel they will be losing face by giving a reduction.
The Thai society is in many ways far from what we farangs are used to.

[PeteC]

So many possible answers. I think the most sound, for the moment, is to remember that if they weren't selling the cars, they wouldn't be priced that way....what the market will bear.

There is a big segment of the population who will never be able to afford to pay cash for a new car, and can't qualify for normal bank financing. I imagine the tent used car sellers offer financing at higher rates, and do their dirty work like most loan sharks when the person can't pay. I would think there are many cars in those tents that have been owned short time by a variety of financially challenged Thai buyers. Look at the repossession rate for motorbikes, it's huge. I can't see where cars would be any different.

For the mile minded people like me, 100,000K and 5 years is about 62,000 miles in a warm, snow and salt free environment. That's nothing if the vehicle was well cared for and can easily double that usage, miles and time, trouble free IMO. If a diesel, even longer, much longer. Pete

[PeteC]

More thought on this. We had another thread that rightfully said that Thais take very good care of cars and appreciate their importance. I would think the stats on car thefts here is very low, and I only hear about the gangs that take cars over the border in a mafia type organized fashion, not your casual amateur car thief/parts stripper like we have in the west. Just like most of us, a car here is second only to a house concerning lifetime major purchases, and a house purchase the majority here will never see unless it's a shack.

Unless it was a fleet delivery car/truck or in some kind of limo service, I think your odds of getting a very well cared for care, even pampered, are high. Pete

[bcrglobal]

I think it's also important to remember that part of the reason used cars are valued so little in Europe and America is the very high cost of maintaining them--labor is very expensive. Here, labor is very cheap, so even an old clunker won't cost that much to keep running.

[Takiap]

Personally, I haven't been able to figure it out myself. If you're paying cash, a secondhand car be a good deal, even if you're only saving a 2 or 3 hundred thousand baht. If you're getting finance, then buying secondhand just doesn't seem to make sense. From what I've been told, for a secondhand car, you need to get a regular bank loan if you can't afford cash, and the interest rates for stand loans are higher than what you'd pay if you took financing for a new car.


Then again, I suppose for a lower end working class Thai family, even a small saving of 50K is important.


Anyway, I still don't understand it. To answer your question...............I can't see this trend changing anytime soon.

[Dannie Boy]

Metallic Black with Red Momo leather. This is the 2.0litre model with the formula 1 (flappy paddle!) style gearbox, this gearbox is a joy to use and there is also a full auto mode. Engine and gearbox are great, body work is fine with a few minor scuffs, the interior is good with 160,000kms done. 310,000 baht.
Please contact John on 0878211077.

I know this is not being sold by a Thai, but seems to prove that reasonable deals are available?

[johnnyk]

I had a used Benz 280SL once. Never again. Its not what it costs to buy, its what it costs to keep the ffcucking thing running. How about $650 CDN for a muffler? Just the can, no clamps or fittings. Installation extra. I never got it out of the shop for less than $1000CDN per visit. Fuhgeddaboudit!

[STEVE G]

Is this market destined to be like it is now for a long while or are there problems that folks see in the future?

I have a suspicion that things might change in the future due to the fact that high second-hand values have perhaps been driven by a growth in the wealth of the segment of the population capable of owning vehicles combined with a lack of supply of older vehicles as sales were much lower in previous years.

[Nereus]

I had a used Benz 280SL once. Never again. Its not what it costs to buy, its what it costs to keep the ffcucking thing running. How about $650 CDN for a muffler? Just the can, no clamps or fittings. Installation extra. I never got it out of the shop for less than $1000CDN per visit. Fuhgeddaboudit!

Yes, that is exactly correct. Even with the cheaper labour rates in Thailand many parts of better quality cars have to be imported at a high cost. Or a fake aftermarket item is used in its place.

I have to disagree about Thais taking care of their cars. The appearance or “bling”, yes. But preventative maintenance: “what it is?”

While a new car is still under warranty Thais will take it back to the dealer because they believe they are getting something for nothing. The instant it is out of warranty, or something occurs that is not covered by warranty; it goes down the road to Somchai.

Most of the authorised Thai dealers prefer it this way as well, because Thai owners object to paying for the factory approved maintenance routines, and the set times it takes to carry out those routines, and the use of genuine replacement parts.

I have seen a 10 Million Baht Range Rover being worked on in what is just a “lean to” tin shack on the side of the road! There are some after market workshops that are properly equipped, but even with those try asking the owner how he determines critical settings from a manual written in English, or German.

Most modern cars require a laptop, or “test book” as it is called, to both diagnose system faults, and in some cases make adjustments. Very few of Somchai type places have them, and in addition, a lot of the software is proprietary and not available to after market service shops.

As for what the OP has posted, it’s like Pete has written. It is a competitive market, and the prices do reflect the demand. There are good condition second hand cars available, but you either need to know what pitfalls to look for, or have somebody with you that does know.

[johnnyk]

I had a used Benz 280SL once. Never again. Its not what it costs to buy, its what it costs to keep the ffcucking thing running. How about $650 CDN for a muffler? Just the can, no clamps or fittings. Installation extra. I never got it out of the shop for less than $1000CDN per visit. Fuhgeddaboudit!

Yes, that is exactly correct. Even with the cheaper labour rates in Thailand many parts of better quality cars have to be imported at a high cost. Or a fake aftermarket item is used in its place.

Nereus,
On the 280SL I was able to get an aftermarket "fake" muffler from California. I got lucky, it cost only $535 CDN. Fabled M-B engineering means you can't go just anywhere, many garages won't go near the cars because they are too complex and difficult for the average mechanic to fix quickly or easily enough to make a profit.
One more example: I needed a 10cm diameter flex tube that brings air to the fuel injection unit. I thought this isn't exotic, a standard sort of thing, maybe costing $2.50 max at the hardware store. Nope.
The Benz tube was not 10cm/100mm but an odd size like 103mm. I had to go to M-B and pay $45 for it!

[Babylon]

I think cost is maintenance is one factor, defiantly. Plus this is a friendly environment for cars, look at the excellent condition some Vw busses are in over here.

Secondly, but most importantly, just supply and demand, I don't know the figures, but new car sales have taken off in Thailand over the last 10 years, and so the supply of e.g 8 year old cars is relatively small, certainly compared to the UK or a another western market, as they are rare they will hold there value better, as more people chase fewer older cars, to save some money. If this is the case, then to answer the OPs question, there should be a natural adjustment over time as yearly sales flatten out etc, but I suspect this will be 10 years ?? (total guess) and I also suspect it will be fairly natural, there is not going to be a sharp shock. Of course the supply problems from the floods, have just added to second hand values as new cars have been impossible to buy.

The exception to this is if they removed the very high tax on imported luxury cars, this would suddenly make imports much cheaper, and would defiantly knock on the 2nd hand market, but only for imports. However I don't see this happening in the next 5 years, but who knows?

[PET]

I think cost is maintenance is one factor, defiantly. Plus this is a friendly environment for cars, look at the excellent condition some Vw busses are in over here.

Secondly, but most importantly, just supply and demand, I don't know the figures, but new car sales have taken off in Thailand over the last 10 years, and so the supply of e.g 8 year old cars is relatively small, certainly compared to the UK or a another western market, as they are rare they will hold there value better, as more people chase fewer older cars, to save some money. If this is the case, then to answer the OPs question, there should be a natural adjustment over time as yearly sales flatten out etc, but I suspect this will be 10 years ?? (total guess) and I also suspect it will be fairly natural, there is not going to be a sharp shock. Of course the supply problems from the floods, have just added to second hand values as new cars have been impossible to buy.

The exception to this is if they removed the very high tax on imported luxury cars, this would suddenly make imports much cheaper, and would defiantly knock on the 2nd hand market, but only for imports. However I don't see this happening in the next 5 years, but who knows?

DEFINITELY

[Pleng]

It's the same with the room rates in guest houses. They always seem to stick to the list price even when there is far between customers.

I think if you're only staying for one night you stand d*ck chance of getting a discount, regardless of how busy they are. I've only ever once not been able to negotiate a discount for more than one night (and boy did I regret on walking out on that deal. Looks like I too have some issues with letting face get in the way... )

But I hear what you're saying. It seems like people are more likely to give discounts when they've had a good day, money wise. I was trying to negotiate a discount on a couple of pairs of trousers at the night market. It was pretty much the 'usual' discount rate one would expect, nothing special. The vendor told me that he could not give me a discount because it was raining and he didn't have many customers. He told me to come back the next day and he could give me the discount! Needless to say, I walked to another vendor across the market selling exactly the same wares...

[Coldmike]

I'm curious if this is going to change with the flood damaged cars. It can be very difficult to see if they were in the flood. Cosmetics are cheap to fix, but electrical problems are hard to see before they corrode and cause issues. I would much rather spend a little more to buy new, especially now.