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Brunei’s used car market picture by Brunei Times |
It all relates to demand and supply, as with other things that find themselves for sale in a market. At least it’s based on some vague principals of demand and supply.
As with the usual case if there is a limited supply of a particular car, and lots of people are willing to pay good money for it, then the prices would tend to rise… or at least I thought that to be the case.
Interested buyers
Here in Brunei it seems that buyers are more interested in just waiting for prices to drop and drop. They probably know that if they are in the market for a particular car, one will come up some time, in most cases later rather than sooner... but if they’re willing to wait, they’re very likely to get the bargain price that they’re looking for.
Why is that the case? Well, in the years that I’ve been ogling at cars that have now gone from being contemporary to classics (I’m not so old that cars I fancy have become vintage unless they were vintage to begin with) the only time I’ve seen their prices actually go up is when I’m surveying prices for the same market abroad and outside of Brunei.
Cars here only seem to do one thing, drop in price, and if they don’t it’s only because the people who have the cars to begin with aren’t selling. The term “sellers’ market” comes to mind, but like I mentioned earlier, it’s just a case then of the buyers waiting and waiting, until the seller’s resolve has finally broken.
Older cars and used cars
Demand for certain older or rare cars seems to exist among the people that actually know or place value in the car they’re looking to buy.
Let’s give an example. An old Mercedes E-Class W124 was being sold for several thousand dollars as advertised in the news paper the other day. If you go look at the age of the car, and the mileage you’d be saying, “Ok, Benz of that age, that sounds about right.”
Then I found an R129 SL600, V12-engined and the same age and with a fraction of the miles of the E-class going for three times the price and I’m left absolutely shocked.
The SL600 is basically selling for nearly five per cent of the cost of the car brand new. But an E-class that’s done more miles, considered to be less premium to the SL (what used to be the flagship of the Mercedes Benz 2-door line-up), has managed to keep its price to maybe 12 to 15 per cent of what its price when brand new.
But this is the oddity of the used car market in Brunei that I mentioned, when it comes to something like a premium luxury car, the Mercedes Benz actually keeps its value the best out of all the car brands out there.
Try and find something like a BMW, Jaguar or Lexus of the same age as the R129 or W124 I mentioned above and you’ll find that that depreciation has hit very, very hard.
One of the reasons the Mercedes W124 keeps its value so well is that the car was built during an age where car makers, especially at Mercedes Benz over engineered their cars. They hardly broke down, and those who looked after their cars don’t have any kind of problem keeping them running.
The R129 is somewhat different in that the parts are more specialised and their aren’t many available in the region and are more likely required to be sourced from Germany. Logistically this is a nightmare for those who encounter any issues, and is one of the reasons why people get put off, not just owning a specialised car like the older SLs but just about any other classic premium luxury or sports car.
Another example I can think of for that to be the case is the Honda NSX, a brilliant steer, comfortable and entertaining when you get the chance to drive one, but the repair bill for something like the power steering can soar into five figure digits... depending on how unlucky you are.
However because these cars hold a special place in the hearts of some individuals, there will always be someone who is willing to stump up the cash for the keys to the proverbial car of their dreams. Friends of mine sold their vintage Toyota Celicas for a pretty penny, cars that would have been destined for the scrap heap without the intervention of their owners wanting to restore and fix the cars. When I heard that they were sold for around $10k I didn’t bat an eyelid, until the person telling me the news said that was the amount the cars had fetched separately.
Going along the same vein, someone recently told me the story of how an old 911 964 was sold for $50k after it had been fettled and given the resto-mod treatment from its owner. Others that I’ve seen floating around for sale are going for about $30K or so, if you can find a seller willing to budge on the price.
Value
It seems that in Brunei one way to ensure your car keeps its value better than others is by making sure you buy one that’s easy to maintain and are reliable to being with.
Toyota, despite its recent turbulent history of recalls (of which very few were affected in Brunei compared to the millions around the world) is another brand that sees its prices maintain to a certain degree, when I say maintain I mean they don’t depreciate quickly.
I saw a Toyota Land cruiser selling for much more than a Mitsubishi Pajero, despite being nine years older. I tell you the Bruneian used car market was weird.
It has made me think twice about plunging into the unknown and getting some cars that I fancied owning... not because I’m worried I might not like them, but when the time comes for me to sell, would I be able to find someone else that places the same value as I do in the car that I’m intending to let go.
Even looking at it from my own personal perspective, it’s all very hypothetical and abstract. So I’m taking the pragmatic view that when I do find a car I’m keen on buying that’s vintage and has some kind of sentimental attachment, I’ll probably end up driving it into the ground. That way when depreciation threatens to sink the value of the cars I love, I’ll just take it with me!
The views are the writer’s own and do not necessarily reflect those of The Brunei Times.
The Brunei Times
http://www.bt.com.bn/features/2014/04/20/brunei%E2%80%99s-used-car-market
