Used Car Sales Surpass New Cars in S. Korea

In 2011 S. Koreans bought 2.32 million used cars to only 1.6 million new cars, with the average price of used cars rising to 7 million won ($6,200). Korea’s total annual used car market is valued at 16 trillion won ($14.2 bil.).

Used cars sales are breaking with the past trend of rising at about the same rate as new car sales. Now new car sales are declining as prices continue to rise and consumers struggle with increasing debt levels, while consumers are placing growing confidence in the durability and reliability of used cars.

Replacement cycle of new cars have risen from 5.7 years in 2003 to 7.4 years in 2010, according to Hyundai Motors data. Improving automotive technology allows buyers to get seven more years of good use out of a used car, without encountering significant mechanical issues through at least 200,000 kilometers (125,000 miles).

The most popular used car at SK Encar, Korea’s top used car dealer, is the Grandeur TG which sells for about 17 million for a 2.7-liter version of the 2009 model, according to Chosun Daily. That represents a savings of 40% off its original MSRP three years ago. Vans are also popular among used-car buyers, many of whom use them for business.

Those buying small used cars don’t seem to put much importance on color, but among those buying mid-size and large cars, the color can make a difference of about 1 million won ($880) in the ultimate selling price. Koreans show a marked preference for black, silver and white over more colorful hues.