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The used car market is growing while the dream of owning a brand new car becomes more distant for many Brazilians. Find out why more and more consumers are opting for pre-owned cars.
Over the past 10 years, the used car market has shown surprising growth, while sales of new vehicles have fallen dramatically. The combination of economic factors, rising prices of new cars and additional costs such as taxes and insurance, has led Brazilians to seek more affordable and affordable options. advantageous in pre-owned. In this article, we will explore why brand new cars are increasingly out of reach for the general public and how pre-owned cars have become the best option for many drivers in Brazil.
When did the used car market start to expand?
A decade ago, the vehicle market in Brazil had characteristics that seem distant today. In 2014, the number of new cars registered between January and August exceeded 2 million units. At the same time, the used car market was already beginning to show its relevance, with more than 6 million vehicles being sold in the same period.
Although the used car market was already significant, the difference in relation to new cars was not so striking at that time. Access to vehicle financing was relatively easier, with controlled interest rates and terms that allowed consumers to plan the purchase of a brand new car.
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Furthermore, incentive programs for the automobile industry helped to balance the price of new vehicles. The result was a significant portion of consumers who opted for vehicles straight from the factory, even with pre-owned options available.
Understand the growth of the used car market
However, the scenario began to change, and the economic crisis and financial stability that marked the following years directly affected the purchasing power of Brazilians and this directly impacted the new car market, which led to growth in the used car market.
Over the years, the vehicle fleet in Brazil has begun to age rapidly, and this phenomenon is directly linked to the decline in new car sales and the increase in used vehicle sales. Today, it is common to see cars that are more than 10 or even 15 years old on the streets, and this reality brings a series of challenges, such as increased maintenance costs and a negative impact on vehicle safety and efficiency.
What many people don't realize is that the aging of the fleet also directly affects fuel consumption and pollutant emissions, as older cars tend to use more fuel and, without proper maintenance, this consumption can increase even further, harming both drivers' pockets and the environment.
Brazilian purchasing power is affected
The decline in Brazilians' purchasing power is one of the main factors behind the growth of the used car market in recent years. To understand the scale of this problem, we need to go back to the scenario of 2014.
At the time, the minimum wage was R$724 and the best-selling car in Brazil was the zero km car. Volkswagen Gol cost just over R$30.000. That was equivalent to around 41 minimum wages.
Fast forward to 2024, and the minimum wage has increased to R$1.321, but the price of vehicles has risen disproportionately. Today, the best-selling new car, the Volkswagen Polo, costs approximately R$87.000, which is equivalent to more than 60 minimum wages.
In practical terms, Brazilians need much more income today to buy a brand new car than they did 10 years ago, making the dream of owning a new car a distant dream for a large part of the population. This absurd difference between income and car prices directly affects consumer choices, and people are opting for used vehicles not because this is the preferred option, but because it is the only affordable option for many.
