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| This Jan. 5 photo shows vehicles lined up in a used car lot in Seoul. Yonhap |
By Kim Hyun-bin
Many young drivers in their 20s to 40s are rushing to sell their vehicles, burdened by high interest rates and inflation amid an economic recession, according to industry officials, Friday.
The Ministry of Land, Infrastructure and Transport's car registration data in December last year showed the number of vehicles registered by males in their 20s to 40s decreased by 98,967 from the same month last year to 6,496,614. The number of vehicles registered to males in their 20s decreased from 416,321 to 409,258, from 2,237,794 to 2,172,893 among men in their 30s, and from 3,941,466 to 3,914,463 among males in their 40s.
Industry analysts believe high interest rates have taken a toll on young drivers who purchased high-end vehicles and are burdened by the sharp rise in maintenance and installment payment costs. Recently, many young drivers with low incomes have been selling their vehicles.
According to the Credit Finance Association, major card companies levy between 7.8 percent to 11.1 percent interest on car's installment financing, a sharp increase from early last year when it was in the 2 percent range.
"The number of vehicles available for sale has decreased due to semiconductor supply shortages and falling demand, and the slow economy seems to have led to a reduction in the purchase of vehicles by young people as they cut spending. Also, increased rental and lease contracts could also have caused individual purchases of vehicles to decrease," an industry official familiar with the matter said.
According to the CarIsYou Data Research Institute, 960,227 vehicles were purchased by used car traders from January to November of last year, of which 847,673 were sold, and there were 112,554 in inventory. Among them, the inventory ratio of popular models less than a year old was 32.8 percent, up sharply from 20.2 percent the previous year. Car trading platform, Encar.com, said that the market price of major domestic and imported car models in January of this year fell 1.52 percent compared to the previous month.
