When Will Price Drops Reflect on Used Cars?

With the changes in exchange rates, the number of vehicles in the low SCT band in the automotive sector gradually decreased. For this reason, the Special Consumption Tax (SCT) base limits for new vehicles in the automotive industry were updated and two new scales of 60% and 70% were added. Commenting on what this change will bring, Cardata General Manager Hüsamettin Yalçın said, “There will be no change with this new SCT base update for cars under 265 thousand TL. For cars under 425 thousand TL, there will be a return of 5 to 10 percent. Especially domestically produced vehicles remain in this segment. For this reason, it would be fair to say that they will benefit from this change. On the second hand, the reflection of the discount may be 1 month later," he said.

The Turkish automotive sector started the first month of the year with changes again. Brands, which had to raise almost twice a month due to the variable exchange rates in the last months of the last year, went to some discount with the last exchange rate change. However, as the number of vehicles in the low SCT segment remained very low, the SCT base was changed.

Added two new baselines

With the changed SCT application, two more base periods of 60% and 70% were added in addition to the existing segments. The Special Consumption Tax (SCT) base segments to be applied in the purchase of new cars are determined as 1600 percent, 45 percent, 50 percent, 60 percent and 70 percent for cars with engine cylinder volume up to 80 cubic centimeters.

What will this change bring?

Commenting on the new vehicle market after the change in the ÖTV tax base update, Cardata General Manager Hüsamettin Yalçın said, “This new regulation in the ÖTV base did not increase or decrease the rates in the tranches. An arrangement was made in the form of adding new segments to the SCT base segments. For this reason, this update will not cause a price change for vehicles currently under 265 thousand TL. There will be a 425 to 5 percent comeback in the price of vehicles under 10 thousand TL. It would be correct to say that they will benefit from this change, especially since domestically produced vehicles remain in this segment.”

“It is not immediately reflected in the second hand”

Emphasizing that the changes in the new car market also affect the second hand, Hüsamettin Yalçın said, “In the second-hand automotive market in Turkey, more than 3 times the new car market takes place. Of course, the changes in the new vehicle market also affect the second hand, but this change cannot happen from today to tomorrow. In the second hand, there is a slight return in prices due to the fact that the sellers have started to pull back their vehicle prices. With this SCT base update, we can see some slight rebounds in the second hand after about 1 month," he said.

“The number of second-hand ads has doubled”

Emphasizing that the second hand price change can only be for certain models, Cardata General Manager Hüsamettin Yalçın said, “It will be possible to see an effect on the 2021 model domestic production vehicles. There may be a comeback in the 3-4 percent band. I do not expect that the change in the SCT base zones will have much effect on other vehicles. As the consumer's need for cash has increased significantly, second-hand supply has also increased significantly compared to last month. Compared to a month ago, the number of second-hand vehicles for sale on some advertising platforms has doubled. And yet, in the period when the supply is abundant, a new rise in second-hand prices is not seen anyway. We do not foresee new exorbitant rises or dramatic declines in the coming period. Prices seem to be in an even better position after 2 month.”