Used Car Sales Down As Car Usage Drops

Due to the continuous recession of the domestic economy and high oil prices, the domestic used-car market is facing a crisis.

Plunging since the beginning of this year, the used-car market has suffered a direct hit from rising oil prices.

--Used-car dealers quitting the business

At the West Seoul Car Dealing Market on the afternoon of May 21, so-called, “Ddu-bang,” salesmen from the used-car market, were soliciting customers, even stepping up to the center line of the road near the market with road construction work was in progress to catch the attention of people freshly arriving off of taxis.

Kim, a thirty-six-year-old used-car dealer with eight years experience, stopped calling people and lighted a cigarette when the number of customers fell to a trickle on the street. He sighed, saying, “If the tendency of bad business like today continues, I should be looking for another job.”

On the same day, at the Seoul used-car market located in Jangan-dong, Dongdaemun-gu, Seoul, less than ten people were looking for cars at the market even though approximately five hundred cars were parked in the more than 10,000-pyoung site.

Oh, a 43-year-old used-car dealer who runs “A” Used-car Market in Gayang-dong, Seoul, said that “at least seven to eight cars should be sold in order to maintain our office; nowadays we sell less than four to five cars a day.”

At the Gayang-dong market, there are many offices cut off from the electricity supply because increasing numbers of offices have even failed to pay their electricity bill. Among 27 corporations that moved in the nearby Hansung used-car market, four have closed down due to their failure to pay the office rental fee. Yoo Kwang-young, the 43-year-old business chief of Hansung used-car market said, “Approximately ten offices in our building can manage to maintain the status quo. There are several dealers who have not paid their office rental fee in two years.”

--Gasoline cars are a cause of worry

Representative of the current used-car market, this place was crowded with people looking to buy used cars from last year. Due to the economic recession, more customers are looking to purchase used-cars rather than buying brand-new cars.

But even the number of people trying to buy used-cars have been reduced because of the continuing, and in some aspects, worsening, economic recession.

“During the financial crisis period, we had room to make a profit because there were many emergent cars for sale at low prices, but nowadays, dirt-cheap cars cannot be found any longer, and customers no longer visit our market,” said one salesperson.

Though telephone calls inquiring about used-car deals were continuously ringing in each of the offices, in most cases people were calling to sell their cars. Park, a 46-year-old used car dealer said that “more than ten telephone calls per day are from people who want to sell their cars.”

“As the gasoline prices have soared, gasoline cars are available on the market on a particularly large scale. But people are looking only for the diesel and liquefied petroleum gas cars,” said a used-car market’s president. In other words, few transactions are being made because the balance of supply and demand between types of cars in the used-car market does not fit with each other.

“In particular, large-size gasoline sedans in the 2000cc or larger class are the most unpopular,” said Moon Hyung-ok, the chief of Janganpyoung used-car market.