“You can buy a car you like and drive it for a long time. “You should buy the car you want and enjoy it, so why should you think about selling it when you get a new car?”
In Korea, design and fuel efficiency are often considered when buying a new car, but in developed countries such as the United States and Japan, used car prices are also carefully scrutinized. This is because it is believed to be more economically efficient to buy a second-hand car whose price has not dropped significantly. No matter how low the price of a new car is, people are reluctant to buy a car that will drop to a bargain price when it is resold later.
Song Seon-jae, an analyst at Hana Securities (responsible for automobiles), said, “If you look at economic factors only from the perspective of the vehicle owner, the total cost of ownership (TCO) is more important than the initial price and was paid ” He added, “TCO is ‘new car price + maintenance cost. “It is calculated using the formula ‘Used car price.’ If the price of a used car is high, the TCO is lower, so (the market price of a used car) is a factor that increases consumer choice,” he said.
So what is the vehicle model that best protects the value of used cars in Korea? Chosun Ilbo [왕개미연구소]Using statistics from the Korea Insurance Development Institute, vehicles with a slight price reduction compared to new cars were analyzed by dividing them into domestic cars and imported cars.
Hyundai Palisade is in first place when it comes to used car price protection. New car price starting from 40 million won./Hyundai Motors
✅ SUV is an honor student with excellent price protection
According to data from the Korea Insurance Development Institute on the 11th analyzing 2019 new car prices and 2024 vehicle prices of 52 domestically produced vehicle models, all of the ‘price protection honors’ had a relatively high residual value with new car prices in SUVs (sport utility vehicles).
Vehicle value refers to the current value of the car, and is the basis for car insurance premiums and insurance payment. The Korea Insurance Development Institute, an organization specializing in calculating insurance rates, publishes it every three months. Because it is set conservatively, there is some difference from the actual transaction price in the used car market, which is sensitive to supply and demand.
The third place car model with less value over the last 5 years and better price protection was Hyundai Kona (small SUV), and second place was Hyundai Santa Fe (medium SUV). First place was a Hyundai Palisade, a large SUV. For these three SUVs, the residual value of the vehicle price was 51-55%, and all were more than 50%. Compared to inferior students, whose residual value is only around 42-43%, the gap was large.
Graphics = Chosun Kwon Hye-in Design Lab
An official from the Insurance Development Institute said, “SUVs are practical, there are almost no event discounts at the time of sale, and demand is steady, so the price depreciation is low.” He added, “The interior space is large, so families can ride comfortably, and the driver’s seat is high, so visibility is low.” “Because they are good, the preference for female drivers is also high,” he said. This official explained that the Palisade is so popular that even single people who live alone choose the Palisade when buying an SUV because of the trend, the bigger the car, the better.
An official in the used car industry said, “At the start of the launch, there were a lot of people waiting for the Palisade and there weren’t many for sale, so a strange phenomenon happened where used cars were sold for the price of one. a new car.” He added, “When you buy a car, it doesn’t take much time until the delivery date and you can get it as soon as tomorrow (dealer) A) If you say that, you must consider that the depreciation is very large,” he said.
In 2020, the car that Samsung Electronics Vice Chairman Lee Jae-yong personally drove to the recent funeral of Samsung Group Chairman Lee Kun-hee was ‘Palisade’./Chosun DB
If we look at the residual value of each vehicle model by dividing it into 280 items rather than a detailed model average, the New K5 1.6 Turbo of Kia K5 was first with a residual value of 56%. 2nd to 4th is Hyundai Santa Fe (R2.0 → R2.2 → 2.0T), 5th to 8th is Hyundai Palisade (3.8 2WD → 2.2 2WD → 3.8 4WD → 2.2 4WD), 9th place is Kia RAY (THE NEW RAY) 1.0 LPi), followed by Hyundai Avante (The New Avante AD Smart Stream G1.6) in 10th place.
✅ The biggest imported car is the Porsche Cayenne
Among 444 imported car models, ‘The New Cayenne’ Porsche Cayenne ranked first with a residual rate of 48%. 2nd to 4th place was BMW 620d xDrive GT, 520i, and 620d GT, and Jaguar F-Type P300 in 5th place with a residual rate of 46.8%. Additionally, Honda Civic 2.0, Toyota Lexus NX, and Chrysler JEEP All New Wrangler 2.0 were named. Tesla, the leader in electric vehicles, was not included in the top 10 list, and its residual rate was 40.5%, falling below the middle.
Graphics = Chosun Kwon Hye-in Design Lab
The average residual rate for imported cars ranged from a minimum of 36.5% to a maximum of 48%, which was generally lower compared to the residual rate for domestic cars (41-56%). An official from the Korea Insurance Development Institute explained, “There is a difference in the residual rate because the standards for calculating the number of vehicle passengers for domestic cars and imported cars are dual.”
Minwoo Han, CEO of Ziccar, said, “Some imported car brands hold big discount events to clear inventory when sales volume drops. In this process, if new car prices become cheaper, it used car prices will inevitably also be affected.” CEO Han Min-woo continued, “If a new car is popular, its residual value remains high over time, but since there is no demand for big black cars that are favored by high-net-worth people status as CEOs, price protection is not good and depreciation is severe.”
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