Korea's used car market is growing rapidly with 2.32 million second-hand cars sold last year, more than the 1.6 million new cars sold. The average price of used cars has reached W7 million and the local market is now valued at around W16 trillion (US$1=W1,130).
◆ Driving Sales
Previously, the markets for new and used cars tended to grow in tandem as motorists sold one vehicle and replaced it with a newer one. However, flagging sales of new cars recently has not hampered but in fact seems to have helped sales of used cars, which are enjoying something of a boom in recent years.
The Ministry of Land, Transport and Maritime Affairs said that many consumers cannot afford to buy increasingly expensive new cars as they struggle with growing household debt amid the economic recession. As a result, they are turning to cheaper used cars.
Another reason for the surging sales is the improved quality of the vehicles being built nowadays, which makes buying second-hand cars less of a gamble.
According to Hyundai Motor, the replacement cycle of new cars grew from 5.7 years in 2003 to 7.4 years in 2010. Furthermore, they can now last for another seven years on average before being scrapped.
"Cars have become durable and reliable enough in recent years to go 200,000 km without any significant problems," a Hyundai staffer said.
◆ Preferred Models, Colors
The most popular second-hand car at SK Encar, the biggest used car dealer in Korea, is the Grandeur TG. A 2.7-liter model made in 2009 sells for around W17 million, roughly 40 percent cheaper than its original asking price three years ago. Vans, which are favored by small business owners, are also proving huge hits in the used car market.
When it comes to color schemes, customers buying subcompacts and compacts do not seem particularly bothered. However, for mid- and large-sized sedans, the same model can sell for up to W1 million more depending on its color.
Choi Hyun-seok, director of SK Encar, said, "Korean consumers' favorite colors are achromatic colors such as black, silver and white. As such, cars of these hues have a stronger resale value."