Economy 8 May 2024, 1:21pm

Used car market could take off in Hungary in the coming months

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The Hungarian used car market grew significantly in the first quarter of 2024, with an average of 75,400 second-hand cars sold per month in the first quarter of 2024. This represents a 13% increase over January-March 2023, according to Datahouse figures. Experts project a further surge in the coming months, driven by a combination of a long-unseen activity from private buyers, a more favourable credit environment and lower interest rates than last year.

According to Datahouse statistics, an average of 75,400 second-hand cars were sold every month in the first quarter of 2024. This represents a 13% increase in annual terms. Traffic on used car portal Használtautó.hu also point to an increase in demand, as the number of visits reached 12 million in April, which is 15% more than in April last year.

This number could rise further as car market experts unanimously predict a further strengthening of this year's recovery in the coming months.

"Several of our researches confirm that the end of spring and early summer is the most active period for shoppers. The usual phenomenon is now being enhanced by average prices falling steadily for the first time in years, which means that the used car market could pick up significantly this year. Moreover, unlike the new car market, the used car market is still dominated by private buyers rather than [corporate] fleet buyers.

For them, choosing the right car also raises important financial questions,

commented András Horváth, car market expert at Használtautó.hu.

The upturn in sales could also be boosted by a more favourable financing environment, where lower interest rates on loans could put car buyers in an even more advantageous position.

On the financial side, the used car market is also expected to continue to pick up, with buyers typically supplementing their existing funds with personal loans that can be used freely. At the beginning of the year, lending rates have almost halved compared to last year.

According to central bank (MNB) data, in May 2023, the average loan-to-value ratio for HUF personal loans was 19.45%, while currently loans can be taken out with an APR (average percentage rate) of 11.93% for those who opt for cheaper loans.

Given the positive trends in the first quarter, the combination of favourable borrowing conditions and continued strong demand is expected to stimulate the used car market.