By Jane Han
Staff Reporter
Four months of owning a car was enough to spoil Jung Hyun-joo, a 31-year-old mom and a part-time graduate school student. She purchased a brand new Hyundai Sonata NF in July as her household's second car to commute to school faster, shuttle her daughter to a daycare center and make quick runs to the grocery store. But stretched for cash, Jung recently had to give all that up.
She put her car up for sale at a used auto market and got paid about 70 percent of her purchase value.
``Bearing the loss was better than shelling out 600,000 to 700,000 won a month to cover monthly payments, insurance and maintenance costs,'' said Jung, who had signed a 36-month financing program.
Many struggling individuals looking for quick cash or relief from financial burden are apparently heading down the same road to flog their wheels.
According to used car dealerships, the number of vehicles they have purchased has gone up about 30 percent over the past three months, with many models less than one-year-old and having mileage below 10,000 kilometers.
``A lot of relatively new buyers are trading in their cars as they feel the impact on their wallet is too heavy,'' said Ki Kyoung-hwa, a dealer at Cherry Car, a second-hand car outlet with a countrywide network.
She said supply is plenty, but transactions are slower than ever, down about 30 to 40 percent from last year because the credit crunch zapped the buying mood.
``Few people are looking to buy in the first place,'' said Ki, ``but even if they want to purchase, banks are making it extremely tough to get financing unless customers have top line credit.''
Hyun Soo-jin, an agent at Auto Shop, another dealership, said the slump coupled with the influx of new merchandise is dragging down prices to new lows.
For example, an as-new GM Daewoo Windstorm and Renault Samsung QM5 costs about 24 percent less than brand new ones.
SK Encar, a used car supplier, said prices of mid-sized sedans have shed about one to 1.5 million won in the past two months, with further depreciation expected.
The mood is grim across the board, but there's rare energy in the used car auction market, where exporters are eyeing timely mass purchases to capitalize on the cheap won.
Seoul Auto Auction, the country's largest auto auction, said used car exporters are competing to buy up enough to meet demand from overseas, particularly in Russia and the Middle East.
A total of 211,400 second-hand vehicles were shipped abroad so far this year, up 31.3 percent from last year.