As the price of new cars rises in Hong Kong, some shoppers are opting for cheaper alternative brands to get the same car they bought last year.
A new Tesla Model 3 sedan, pictured here, has been a hit with locals.
The car has become a popular choice for Hong Kong shoppers who want to save money on their car purchases and avoid the hefty sticker price for a car.
Many shoppers are buying second hand for cheaper than their original purchase, said David Lai, an assistant professor of economics at the Hong Kong Graduate School of Business.
“A lot of Hong Kong people are willing to pay a little bit less for a second hand car, and that is a way to show that they are willing and able to take a risk,” he said.
Hong Kong car-dealers are offering guaranteed prices for cars at a rate of 10-20% less than their regular prices.
According to Lai’s research, the guaranteed price of a second-hand car has increased from $1,200 in November to $2,500 in February.
Even though many of the cars Lai studied were not new, many people have bought them in hopes of saving some cash.
One customer said she was buying a used car for $700, a price she believed would be worth $1.75 million (HK$6 million).
“I had never considered that it might be possible to buy a secondhand car at a lower price, and then to have it be guaranteed at the end of the year,” she said.
Hong Kong cars in general are not as expensive as they used to be, but Lai said Hong Kongers are willing pay a premium because of the rising cost of living.
Last year, the Hong Kowloon area saw a 5% rise in car sales.
In response to the rising prices, car-sellers have been increasing their prices in Hongkong.
While a first-year car can now cost around $6,500, a second and a third-year model can go for $12,000, and a fourth-year can go up to $15,000.
And, Lai believes Hong Kong residents are willing for their cars to be cheaper because they are worried about the rising costs of living in the city.
Car-buying in Hong Kampong has also been on the rise since 2015, with car-shopping now worth $2 billion a year.
According to the Hongkowloon Chamber of Commerce, the annual car-price rise has helped attract businesses to the area, as more people can afford to buy luxury cars and buy second hand.
Some car-buys are sold out, with many customers looking to get a cheaper alternative car instead.
With Hong Kong’s population estimated to be more than 1.3 million, the city has a huge amount of cars to choose from, said Lai.
If you’re looking to buy an old car in HongKampong, the HK$2,000-HK$3,000 (HK£2,800-£2.7k) guarantee is a good way to get your hands on the car, he said, adding that the guarantee would help Hong Kong consumers avoid paying a premium for a cheaper car.