"I Sold My Car for 3 Handfuls of Gold!" Market Reverses
The second-hand car market, which has been viewed as an investment tool for a long time in Turkey, is practically hunting for flies. Particularly, the fluctuations in gold prices, currency exchange rate instabilities, and the successive campaigns announced by automotive brands for brand new vehicles have brought sales in the second-hand market to a standstill.
The used car market has come to a standstill.
The second-hand car market is struggling to make ends meet. Industry representatives and car dealers indicate that the stagnation felt in the market for the last six months has virtually reached a standstill in recent days. The sales activity, which was usually experienced before the summer season and holidays in the past, has given way to silence this year.
According to a report featured on Show News, under normal circumstances, dealerships that should sell an average of 15 to 20 vehicles per season are barely managing to sell 4 or 5 cars a month recently. It is reported that the revenues generated are insufficient even to cover the fixed expenses and operating costs of the shops.
The reason for the huge stagnation in the used car market has been revealed: "Last week, I sold a car for three handfuls of gold."
One of the critical factors that locked the market was investors selling their vehicles and turning to gold. Many citizens who converted their cars into cash at high prices and bought gold faced a significant capital loss due to the decline in the gold market. A citizen described the stagnation with these words: 'Last week, I sold my car for three handfuls of gold. Since it's the holiday month, our people are generally going on vacation. That's why there's a bit of a slowdown.'
It is reported that investors who sold their vehicles and bought gold at the level of 1 million TL couldn't re-enter the market and buy vehicles again due to the depreciation of their portfolios to around 800 thousand TL. This situation directly and negatively affected the cash flow and exchange balance in the market.
On the other hand, the closing of the price gap between new and used vehicles also changed consumer preferences. For instance, if a used vehicle priced at 3 million TL has a zero-kilometer option offered at 3.5 million TL band with advantageous credit conditions, it directly leads buyers to opt for the zero-kilometer one.
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