It's a buyer's market for secondhand cars
Before you buy a secondhand car and register it in your name, it must have passed a Transfer Test at Bermuda Emissions Control Ltd (TCD) within the previous 30 days.
So, a count of the number of transfer tests conducted in any one period provides us with a snapshot picture of the state of the secondhand car market.
In July 2009, 892 were tested. In January 2010, 476; July 2010, 551; January 2011, 402; July 2011, 513; and January 2012, 383 were tested. In other words, there has been a decline in the number of transfer tests in each July and each January since 2009 to the present. This would suggest that we now have a buyer's market.
Bermuda's secondhand car market is certainly unusual, the result of the one assessment number one car rule, high new car prices, no secondhand car dealer businesses and the fact that up until 1998, your old car had to be scrapped (cut) before you could register a new car.
Therefore, all secondhand car purchases are done as private deals, leading to wide variances in what owners ask for and what customers are willing to pay.
Talking to the new car dealers, there is certainly a wide range of opinion on whether or not the market could support secondhand car dealer businesses. On the one hand, it is unlikely to be financially viable, as the challenges facing any secondhand car business setting up would include high real estate prices, the finite size of the market and providing customers with a warranty (if at all).
However, if the existing new car dealers could sell secondhand cars, some believe it could enhance their business model by encouraging customers to buy a new car and trade-in the old one, although, again, lack of physical space could be a problem.
A further example of the vagaries of the secondhand market here in Bermuda is to compare prices of cars currently on sale with the same make, model and year of car for sale in the UK.
The following vehicles are for sale on Emoo.bm and I choose to compare them with similar cars for sale on the web site of a national broadsheet newspaper in the UK.
Kia Sportage 2010: Bda$32,000, UK$15-20,000
Honda Fit 2006: Bda$16,000, UK$10-12,000
Mazda 3 2007: Bda$21,000, UK$9-11,000
In the Classified ads of a recent edition of The Royal Gazette, a 2002 Opel Astra is
offered at $7500. The same car can be seen in the UK ads from $1200 to $2000.
As you can see, the Bermuda prices are substantially higher than the UK equivalent. This is the clearest indicator that the Bermuda secondhand market is artificial, immature, bizarre and overpriced.
Just like the real estate market, a glut may mean a drop in prices, which will make those unable to afford a new car look more closely at what's available secondhand.
If you are taking the plunge and are looking to buy a secondhand car, here are a few tips:
· Look around, don't hurry, it's a buyer's market.
· The advertised, quoted price being asked will probably be too high.
· Have the car transfer tested before doing the deal.
· Check the vehicle over yourself as if you were about to bring it to BECL for its annual safety inspection. If you are not knowledgeable, have someone you are confident in to check it out for you.
· Be concerned if the exhaust is emitting a lot of visible smoke.
· Take a test drive.
· Then walk away and think about it.
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