Unique market dynamics: Pre‑owned cars in Russia outpricing new ones
A six-year-old car is likely to cost less than a new one, right? This is not the case in Russia, where pre-owned cars could cost significantly more than their original price at the dealership. This aberration can be attributed to two main factors related to the sanctions implemented against Russia following their attack on Ukraine.
7:46 AM EST, December 1, 2023
According to the website autostat.ru, there are certain car models that, even after six years of use, can see an increase in their residual value in the secondary market. This implies that these car models are not merely retaining their value, but actually becoming more valuable. The five car models with the greatest increases are listed below:
- Hyundai Solaris: 151.8 percent
- Volkswagen Polo: 151.7 percent
- Renault Sandero Stepway: 151.1 percent
- Kia Rio: 150.5 percent
- Lada Vesta: 135.2 percent
As you can note, most of the cars on the list fall into segment B, which isn't surprising since it's the most popular segment in Russia, accounting for up to 35 percent of car sales. Additionally, it's worth noting that the top four models are from western brands, followed by a Korean brand. These models are no longer officially available in Russia following the country's attack on Ukraine.
The Lada Vesta, despite being fifth on the list, cannot technically be considered a Russian car as it was developed under the Renault brand. Although the Vesta continues to be listed on the Lada website, its price is far from appealing. The car is priced at a rather steep minimum of 1.24 million rubles, which is surprisingly high compared to Lada Granta which is only 15 cm shorter but substantially older, and costs a mere 0.7 million rubles.
But why would some six-year-old cars in Russia fetch prices higher than their original purchase costs? The answer lies in the unavailability of western models, the introduction of Chinese alternatives, and the rapidly escalating inflation rate. The relatively high and continually increasing prices of new cars have prompted owners to price their pre-owned vehicles based on current dealership prices, rather than their original purchase prices.
