A relative scarcity of used cars on the market in the last year has helped to push up the price of second-hand automobiles.
A consistent upward trend in prices over the last year shows no sign of decelerating. Last month’s average price increase of 3 percent is the highest ever, according to motoring media Bilbasen, which analysed market figures on behalf of national broadcaster DR.
“The market is overheated. There’s simply such a high demand for used cars. When you combine that with a shrinking supply, we see these massively increasing prices,” an analyst with FDM, the association for Danish motorists, told DR.
Using a four-year-old Skoda Octavia as an example, the price has increased by 30 percent in the last year, from 200,000 kroner to 260,000 kroner, according to Bilbasen.
High demand for used cars is partly a result of longer waiting times on orders for new cars, DR also writes.
That is due to a global shortage in microchips used by all manufacturers in new car production. Closures at harbours and other transport issues related to the Covid-19 pandemic also play a role.
As a result, delivery times on new car orders in Denmark, usually 3-4 months, have approximately doubled.
This means that car dealership forecourts across the country have few used cars available. And even the new models on show are primarily ones that have already been sold and are waiting for delivery.
But used cars were already expensive in Denmark before this. Why?
Road tax, fuel, insurance and maintenance all contribute to the high costs of running a car in Denmark.
In addition, Vehicle Registration Tax (Registreringsafgift) represents an enormous outlay for motorists and must be added to the purchasing price as well as value-added tax (moms in Danish) to find the total cost of buying a new car.
Although this expense may not be payable on used cars (provided they are already registered and have a valid Danish number plate), the knock-on effect of such high prices for new cars can be felt in the used car market.