What Are the Fundamental Reasons for the Emergence of Used Cars?
2 Answers
The reasons for the emergence of used cars include changes in consumer attitudes, updates in official vehicles, and changes in ownership by companies or individuals. Changes in consumer attitudes: As people's living standards improve, new consumption desires arise, leading to a psychological demand for fashion and trends. Many people, driven by the motivation to seek novelty, constantly switch to new cars and sell their old ones. Additionally, some individuals change to higher-end cars to satisfy their self-esteem and desire to show off, contributing to the annual increase in car replacement consumption in China. As buyers of used cars, they are motivated by practicality, convenience, and affordability, placing more emphasis on the actual utility of the vehicle to save money and effort. Updates in official vehicles: Government departments in China are equipped with a considerable number of official vehicles, mostly mid-to-high-end passenger cars, with a small portion being commercial vehicles. After a certain period, these official vehicles are phased out and replaced with new ones. The phased-out vehicles then enter the used car market. Moreover, large-scale events and conferences, such as the Olympics, involve a significant number of vehicles for meetings and activities. After these events, these vehicles also become part of the used car market. Changes in ownership by companies or individuals: In the context of a market economy, company bankruptcies are a natural occurrence. After a company goes bankrupt, asset liquidation takes place, which may include vehicles for sale. These vehicles intended for sale are also an important source of used cars.
Let me tell you something as an experienced driver. The fundamental reason behind the booming used car market is actually quite simple. New car prices are artificially inflated, and they depreciate the moment they leave the dealership—how can average families tolerate such rapid depreciation? I've seen too many working-class folks struggling with mortgages, carefully budgeting just to afford a used car. Take cities with license plate restrictions as the most typical example—a single plate can be auctioned for tens of thousands. Buying a new car isn't as cost-effective as getting a reliable used one. Moreover, automotive manufacturing has improved tremendously; cars within ten years can still run smoothly. Mechanics often complain to me: 'Many new cars nowadays have more issues, while older ones are surprisingly sturdy. Isn't that strange?'
