Everyone already knows that brand new cars are getting more and more expensive; however, what many people are noticing and experiencing firsthand is that used cars are also expensive, in some cases even surpassing new vehicles. 

This is a rather unusual situation, even for those in the industry, such as the experts at Senhor Carros, who, like you, were also caught off guard by this type of situation. 

Therefore, our experts spoke with economists in the automotive industry to understand this phenomenon so we can show you the reasons why used cars... They are expensive.. 

Vehicle prices have been behaving quite atypically lately. 

Some used car models are being sold for more than brand new ones. 

Not since the Cruzado Plan in the mid-1980s had one heard of a used car being worth more than a new car in the Brazilian market. 

Well, after 45 years, this is happening again, amidst enormous turbulence in the Brazilian economy. 

According to a survey conducted by KBB – Kelley Book Brasil, a company specializing in automotive pricing, there are some models, including some listed among the best-selling in the country, where this curious phenomenon has been occurring. 

From the list of the best-selling new vehicles in the first quarter of 2021, here are some examples of used models that are... more expensive Regarding the 0 km models, we can mention:

But why are used cars so expensive? You've probably asked yourself that question before. 

In fact, there are not one, not two, not even three, but four reasons why used cars are being sold for absurd prices. 

Let's find out what those causes are?

Now it's time to examine the real reasons why used and nearly new cars have reached unimaginable prices until recently, and have also become a difficult purchase for a large part of the Brazilian population. 

Ready to go?

The first factor cited by experts as the reason why used cars are expensive is the coronavirus pandemic. 

As the disease progressed, many sectors were forced to partially or completely halt their operations. 

This includes semiconductor factories, which are responsible for materials found not only in cars but also in other manufactured products, such as a wide variety of household appliances. 

As a result, many automakers found themselves needing to halt or reduce their production. 

In Brazil, brands such as Fiat, Chevrolet, and Honda announced collective vacations for some of their employees in 2020. 

Back in 2021, other brands like Mercedes and Ford announced they were ceasing production of their vehicles in the country. The reason: The crisis generated by Covid-19.

Furthermore, the scarcity and difficulty in finding parts directly impact costs. 

This is because an item with low demand and low production has its price increased, which causes the final value of a vehicle produced in this scenario to end up growing. 

One only needs to observe directly how the pandemic has influenced changes in people's behavior regarding travel. 

With many companies adopting work-from-home policies, many people have their cars sitting unused in the garage. 

When you ask why the used cars Are they expensive? One of the most convincing answers is supply and demand. 

With the decrease in production and the long waiting lists that emerged for new cars, those who needed a vehicle began to almost automatically look for used and nearly new models. 

According to data from FENAUTO – the National Federation of Associations of Automotive Vehicle Dealers – this demand generated an increase of almost 31% in sales in February compared to January of this year. 

If we look at the same period in 2020, we will see an incredible and surprising increase of almost 16%. 

As is well known, when there is high demand for a specific product, such as used and nearly new cars, there is consequently also a price increase. 

For comparison purposes only, in September 2020, the used car market had confirmed a significant recovery after months of losses.

For many, this is one of the main reasons that explains the high prices of used cars. 

In addition to the two specific reasons that made the used cars While they are expensive, there is another issue that many people still haven't understood very well, especially in the state of São Paulo.

The government announced an increase in the Tax on the Circulation of Goods and Services (ICMS). 

As of January 15, 2021, the tax rate on used vehicle transactions increased from 1.8% to 5.53%. An exponential increase of 207%. 

For brand new models, the price adjustment was from 12% to 13.3%. In percentage terms, this represents an increase of just over 10%.

When we analyze these numbers, it's possible to see that there was a significantly larger increase for pre-owned models. 

The difference causes the price of the vehicle to increase as well, in order to increase profits in the transaction. 

In addition to being one of the reasons why used cars are expensive, changes in ICMS (a Brazilian sales tax) have also affected the purchase of vehicles for people with disabilities (PCD). 

And the last reason why used cars are expensive is due to the high profit margin that used car dealers know they can obtain. 

In reality, it is the consumer who will pay this high price at the time of resale, not the dealership itself, which will pay the previous owner. 

Furthermore, to analyze whether an investment is worthwhile or not, it is necessary to verify if there has been a real appreciation in the value of the asset being traded. In this case, used vehicles. 

For this, it is necessary to adjust the amount paid when purchasing the vehicle to account for inflation during that period. 

As a general rule, doing so will not be a positive business decision from a profit perspective. 

Despite this, it's possible to say that by opting to change vehicles at this time, the driver will fare somewhat better than usual. 

This is because the depreciation of the most sought-after models is less than usual in recent years, which may lead dealerships or resellers to pay slightly more than they are accustomed to for used vehicles. 

And with that, we come to the conclusion of another informative piece of content developed by the experts at Senhor Carros especially for you. 

Now that you know the reasons why used cars are expensive, you must be wondering:

How can I buy a car and pay a fair price for it?

With the rise in prices of new, used, and nearly new cars, many Brazilians have been turning to auctions to buy their vehicles at a fair price. 

Auctions are a safe and functional way to buy cars, motorcycles, vans, and even trucks for prices lower than the FIPE table value. 

If you're looking to buy a car without being ripped off by these prices, we can help you. 

We've written a special article explaining how and where to bid on your car at auction. 

Interested? Then just click below!