For some time, particularly due to the coronavirus pandemic which forced automobile factories to pause production, new car availability has become limited. At the same time, rising exchange rates and taxes have pushed used car prices sharply upward. The government is reportedly preparing to intervene in this market.
Should You Buy a Used Car?
Many people wondering whether to buy a used car are concerned because prices continue to climb. Opinions are divided. Some expect used car prices to fall once new cars return to market, while others argue that even with new cars available, used-car prices will not drop significantly. This uncertainty creates a dilemma for potential buyers.
The government appears to be preparing measures to address the steep rise in used-car prices—prices that in some cases exceed those of new vehicles. According to reports, officials consider parts of the price increases to be artificial and are exploring options to restrain them. One of the main measures under consideration is allowing the importation of used cars to help bring local prices down or at least prevent further sharp increases.
Used Car Imports
Insider sources indicate that used-car imports are currently viewed as the most important tool to ease prices in the domestic market. Yet some experts warn that imports alone may not cause a large drop in prices, and that the underlying reasons for the market surge must be examined. The dominant factor remains strong demand. Demand had already risen in 2019 and surged even more during 2020 as the pandemic progressed. Factory shutdowns reduced supply of new vehicles, while many people avoided public transport and turned to used cars instead. Additionally, low-interest loans from some banks fueled record levels of buying and selling. As owners sought to replace their vehicles, many raised their asking prices, which pushed overall market prices higher. Currency fluctuations also played a role: at the start of 2020 the dollar exchange rate was around 5.85 TL, and by the end of October it had climbed to roughly 8.40 TL, further driving prices up.
Will Car Imports Arrive?
While used-car prices remain high, the timing and specifics of any government decision to allow imports are still unclear. Even if imports are permitted, experts expect tax rules and measures to avoid unfair competition will limit large price differences between imported and domestic vehicles. For example, bringing a vehicle from abroad might reduce the domestic price of a car sold today for 100,000 TL by only around 10,000 TL at most, according to some analysts.
Imported used cars also raise buyer concerns: they are not new, so questions arise about prior use, accident history and existing faults, and how reliably foreign traffic and maintenance records can be verified. These logistical and safety concerns, coupled with the structural causes of the price surge, suggest that a rapid decline in used-car prices is unlikely in the near term.