Used car prices likely to fall further

JEDDAH – Several dealers have confirmed that there was a 20 percent drop in the prices of used cars in the Kingdom, compared to the prices a few months ago. The dealers expect the prices to slide further in coming months by another 10 percent. They attributed the price drop to an increase in supply coupled with low demand, Al-Riyadh newspaper reported on Saturday. Mukhlid Bin Zayed Al-Mizani Al-Mutairi, deputy chairman of the Showrooms Committee at Jeddah Chamber of Commerce and Industry (JCCI), said many individuals and traders who want to sell their cars are convinced it is difficult to get the high prices they quote amid the ongoing recession, which is experienced by car showrooms over the past five months. Al-Mutairi downplayed rumors that the prices of new cars in neighboring Gulf countries, such as the United Arab Emirates, have dropped by about 20 percent. He said cars with Saudi specifications are still in demand, especially because after-sale incentives being offered by local dealers. Al-Mutairi called on those wishing to sell their cars to act credibly. They should convey the correct information on the market situation to their clients. "Many of those who frequent the showrooms and car auctions are committing a mistake by conveying an incorrect picture about the market and the prices hoping that the prices may go down quickly," Al-Mutairi said. He stressed that they should tell the truth that the prices are on their way to a further drop. Those who are holding on to high prices have no other choice but to sell now at the current prices than wait for a price increase. Meanwhile, Muhammad Ali Asiri Awaji, a former member of the Car Showrooms Committee at JCCI, has downplayed the impact of promotion campaigns carried out abroad on local prices. The discount offers on 2016 and older models are still in place. There are other cars in demand as well. Companies have reduced the prices of previous models by between SR10,000 and SR15,000. The recession in the used cars market will obviously be accompanied by a plunge in prices, Awaji said.