Latvia ranks last among 23 surveyed EU member states in the second had car market transparency index calculated by carVertical platform. Why is Latvia’s used cars market so risky?
There is a large number of damaged cars in Latvia. This means potential buyers have to consider additional investments to repair and maintain their new cars. The average age of cars surveyed in Latvia is 11.4 years, making the country’s car park one of the oldest in Europe. Although there are many damaged cars in Latvia, the average cost of damage is relatively low – only EUR 2 830.
Information from the survey indicates that in other Eastern and Central European countries – Hungary, Slovakia and Romania – the average value of damages is lower when compared with Europe’s west or north.
Losses there are often two to three times higher because car markets in western Europe are tangibly more transparent.
UK is listed at the top of the index. However, this does not mean the British used cars market has no problems. Of all the cars surveyed in the country in 14.5% of cases experts discovered manipulations with mileage. 21% of cars were damaged at some point in the past. All this motivates potential buyers not to trust sellers. At the same time, the UK has a the lowest number of imported cars – only 10.7%.
Germany is second with 12.6% «unwound» odometers and 21.3% damaged cars sold on the market. Although Germany the most influential car manufacturer in Europe, 26.8% of used cars in the country were imported from abroad.
Italy has the smallest number of damaged cars across among 23 countries – 16.6%. The country also has a small number of cars with fake mileage – 11%. Only 32.1% of cars in the country were imported from other countries.
In France the penalty for manipulating mileage is ten times higher when compared with Eastern European countries. This country has only 9.6% of such cars. 28.5% of cars active in the country were damaged, and this is a considerable percentage. The country imports 54% of cars sold on the market there.
As for Central European countries – Croatia, Czech Republic and Slovakia – transparency of their used car markets is average.
These countries have a high ratio of imports, as well as large number of damaged cars. Half of used cars in Czech Republic were imported from foreign countries, 51.6% are damaged, and 11.4% have fake mileage. Slovakia has an even higher percentage of imported cars – 58.5%. On top of that, 57.7% of cars in this country are damaged. One in ten cars have manipulated mileage. The situation is similar in Hungary: 52.6% of cars are imported, 55% are damaged, 12.7% have manipulated odometer readings. Although Croatia has one of the lowest percentages when it comes to forged mileage (10.3%), the country has a considerable number of imported (69.3%) and damaged (56.4%) cars.
Purchasing a used car in Latvia, Lithuania, Ukraine or Romania is a risky business: many cars have hidden damage or malfunctions, fake mileage and other problems.
Scams are also frequent in these countries. Latvia has the sketchiest market by far, as 23.6% of cars inspected by carVerticl were found to have forged mileage. Data from other Eastern European countries is similar here: 19.6% in Romania, 15.6% in Ukraine, 18.1% in Lithuania. Ukraine is the leader when it comes to imports of cars – more than 80% of cars in this country were imported from other countries. Latvia, Romania and Lithuania are not far behind with 75.5%, 67.2% and 75.3% respectively.
A considerably high percentage of imported cars is one of the main reasons why buyers fall for scams. Most of the cars imported to Eastern European countries are imported in damaged state. These cars are then repaired and sold as brand new. This is the reason why there are so many damaged cars in these countries: 59% in Lithuania, 57.5% in Latvia, 57% in Romania and 46.7% in Ukraine.
The survey is based on reports on cars carVertical clients had purchased in the last 12 months. This provided a comprehensive look on the used car market in Europe. The market transparency index consists of 6 data sets: percentage of cars with counterfeit mileage; average «rewound» mileage in kilometres; percentage of damaged cars; average value of damage; percentage of imported used cars; average age of tested cars.