Is Now the Best Time to Buy a Repossessed Car? | Motourismo
By Poch Ceballos
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| Photo credit: Poch Ceballos |
In a word, yes.
While we are biased since we sell repossessed and used cars, hear us out first, then you can make a better-informed decision for yourself.
It’s the best time to buy a second-hand, repossessed car right now because:
1. Bank repossessed car and motorcycle supplies are increasing due to the COVID-19 pandemic and the long-drawn quarantines.
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| Photo credit: Shutterstock |
Just to be clear, we hate this situation as much as you do, and that is to say, we hate it completely. In a perfect world, this COVID-19 virus would not exist and the GCQ, ECQ, MECQ and any other form of quarantine should never have happened. But the virus does exist, and the quarantine has forced a lot of businesses to close or hibernate. Along with that, many employees lost their jobs. Unemployment is at an all-time high and the economy is contracting.
One side-effect is that there are currently a LOT of cars and motorcycles being repossessed by the banks and financial institutions like BDO, Toyota Financial Services (TFS), EastWest Bank (EWB), Security Bank, City Savings, Agribank, BPI, and many more now that the Bayanihan Act is done and there are still a lot of car owners in arrears whom are unable or unwilling to pay or restructure their loans. Net effect? Thousands of used cars that are barely used and still nearly new (remember that people also couldn’t drive around during quarantine). A lot of these units have less than 5,000 on the odometer, but at 30% discounts!
Without getting too much into economics 101, it really is the law of supply and demand at work here - large amounts of supply means that prices will go down. Moreover, since there’s lots of supply, you can have your pick on which car to buy as there are lots of choices. SUVs, sedans, pickup trucks, vans, MPVs, hatchbacks - literally a bunch of options to choose from!
2. New cars and new motorcycles are more expensive due to the DTI Safeguard bond, and manufacturers are pulling out of the Philippines
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This is a double-whammy that really makes our heart bleed for new car buyers. On the one hand, Nissan recently pulled out of the Philippines, too, so many of the cheap pricing afforded to Pinoys are now very limited, if not totally gone, that is.
3. People just don’t need as many cars and are voluntarily surrendering them
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| Photo credit: Shutterstock |
A related side-effect of the quarantine is that the number coding scheme in Metro Manila has been suspended indefinitely, and people don’t travel as much. Everybody’s now relying on the internet for meetings, online conferences, and whatnot, while others may, unfortunately, have gotten laid off from work. This created a situation wherein anyone who had bought a car pre-pandemic straight from the new car dealerships, either via financing schemes or auto loans, would eventually think to opt-out of their steep monthly obligations, or worse - eventually sell or surrender their car instead and get it repossessed.
4. Banks really, really, really need to sell their repossessed car inventory
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| Photo credit: Shutterstock |
This is actually a very interesting fact, and if you don’t already know, banks need to maintain a low enough bad-debt ratio and non-performing assets ratio in order to continue functioning as a bank and to avoid fines and stern warnings pointed at them by the Bangko Sentral ng Pilipinas (BSP). Having a high non-performing asset ratio means that they must clamp down on their lending (not lend as freely) or stop lending altogether. Guess what? Bank repossessed cars and motorcycles are the epitome of bad debt and non-performing assets. Banks want to dispose of them faster than Dom Toretto doing a quarter-mile. And yes, banks are very much willing to give you the lowest prices and undercut each other, just to clear their balance sheets.
5. There’s going to be a shortage of new cars soon
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| Photo credit: Shutterstock |
We may not feel it yet, but we will soon enough. Car chip manufacturers are trying to play catch-up to outfit new cars in the next few months, but many chip makers have already sounded the alarm that there will be a shortage of new cars - that means new cars will be limited in the near future. Thank goodness we have lots of nearly-new vehicles at Automart.Ph.
6. It’s better to conserve your cash for necessary purchases
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| Photo credit: Shutterstock |
We’re crystal balling this a little bit, but we’re fairly sure that economic recovery isn’t happening in the next quarter, or even this year. Yes, the economy will pick up and be strong again and that’s a fact, but it’s not going to be anytime sooner, hence it goes without saying that your hard-earned cash is better off saved and conserved, while you only need to shell out a portion of it for necessary purchases.
During these hard and trying times, it’s wise to be smart on your financial decisions and expenses alike. That doesn’t necessarily mean that you have to automatically and entirely give up some of the finer things in life, like owning a vehicle for example. If you need a car, why bother buying a new one when you can get an almost new unit with deep discounts at 30% (or more) off of the brand new price? Yes, you certainly have that option, and that option is Automart.Ph. It is your go-to site for good quality used and repossessed cars where you can find near brand new units that are a whole lot cheaper. You can choose to bid on the car of your liking to save up even more, or you can just buy the car that you like outright for (and still) a couple hundred thousand pesos less than what you’d expect from new car display centers. And the best part is that an adviser will see to it that you will be assisted throughout the entire process. Everything is about you, your convenience, your savings, and your happiness.
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