CarTrust aims to unlock the potential of Thailand’s second-hand car market | The Story Thailand (2022)

Many people’s lifestyles have relied considerably on their mobility by car. But not all of them can afford brand-new cars, so they turn to the second-hand market.

It is not easy to get a bank loan for the purchase and to find a dealer of quality second-hand cars with reasonable prices.

CarTrust is filling the gap and helping consumers to buy quality second-hand cars from trustworthy dealers.

“We want to create space for people looking for second-hand cars with good quality, particularly women, so that they can rest assured when making their purchase. This is something new for Thailand, in terms of information, protective legislation, and services,” said Sopon Asawanuchit, co-founder & CEO of CarTrust.

A former assistant executive manager of Siam Commercial Bank, Sopon told The Story Thailand as to why he left the executive post to found CarTrust with his friends in 2014.

In his view, cars are a tool that helps its owner tackle their financial problem and reach their life goal.

“We want cars to be something you can trust and be a good financial tool,” Sopon said. “This is the reason why CarTrust was created. We want the [second-hand car] market to be efficient, reliable and fair to the buyers.”

The company offers car checkup services by professional mechanics in order to supply its customers with information useful for those seeking to buy or sell second-hand cars, he said.

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The information covers car details based on thorough checkups and analyses, as well as suggested prices.

From car checkup to refinancing

CarTrust has adapted its business model from mainly financing to providing credit and refinancing for buyers of second-hand cars. Its major business involves lending to car hire-purchase customers looking to repay their remaining debts so that they get the vehicle registration to be used in their application for refinancing.

“The business is growing fast. It’s because Thai financial institutions do not cater to some groups of people. Cars help them to access a source of fund,” Sopon said.

Many people find it difficult to get the green light for their refinancing applications. Several customers are unaware they can seek a new loan while their hire-purchase are still not fully paid, he said. Car refinancing is a good choice for them to find a new fund source with lower costs than credit card or personal loan.

Thailand has the largest second-hand market in Southeast Asia, with average sales of 1.2 million cars a year, or about 100,000 a month. However, only about 5,000 people apply for refinancing a month.

The car refinancing market is relatively new and has the big potential for further growth.

At present, many banks and financial institutions are offering products that cater to Thailand’s second-hand car market. But most customers are unable to secure loans for refinancing their hire-purchase cars, as banks often require that they first hand over their vehicle registration document. Customers often are unable to meet the requirement as they have no money to repay the remaining debt.

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This is a large group of potential customers looking for funds to repay their remaining debt and get the car registration before their refinancing application is approved. However, the market for this business is still limited to local areas dominated by small second-hand car dealerships and local money lenders. These service providers tens to lack service standard, charge high service fees and have no nationwide coverage of services.

Those are reasons why CarTrust becomes a provider of one-stop car financing services available across the country with more ease, comfort and speed.

Sopon voiced confidence that upgraded services with reasonable fees will earn CarTrust more customers while it is increasingly gaining greater market share.

“We want to make CarTrust ‘the most trusted brand’ that customers think of when they look to buy or sell second-hand cars. We can offer them advice and help them with this matter,” he said.

“More importantly, we offer advice free of charge.”

Adopting technology to upgrade services

CarTrust’s business goal is to create a brand that is widely well known and to expand its growth to become the top player in the car refinancing market.

In addition to expanding its network of business allies to cover leading banks, CarTrust also adopts an electronic platform to improve the quality of its services and retain its leading position in the market.

The electronic platform is also used to expand into related businesses based on the current customer database. For instance, CarTrust is expanding into the customer-to-customer (C2C) second-hand car business, in which there are no go-betweens.

“We are entering the business of financing for the C2C market. We find the source of loans to customers who buy or sell their cars directly online,” Sopon said.

CarTrust aims to see a more efficient C2C market for second-hand cars and a profit margin of between 5 and 10 per cent, compared to 15-20 per cent currently charged by second-hand car dealers. With CarTrust tools, every one can be a second-hand car dealer.

For those seeking to sell their second-hand cars, CarTrust can help with checking up, cleaning and reconditioning, as well as car consignment. Also, CarTrust offers partial advance payments if requested by customers or financing their final debt repayment to the original creditors in exchange for the vehicle registration document.

Maintaining leadership through network of allies

CarTrust is now Thailand’s largest provider of car financing for the final debt repayment, with a market share of about 10 per cent and involving more than 6,000 cars a year. Also, it is the main ally of leading Thai commercial banks, including Kasikornbank, Bank of Ayudhya, TTB Bank, and Kiatnakin Phatra Bank, regarding the service of helping customers secure their vehicle registration document before refinancing.

Within the next three years, CarTrust aims to expand its market share by about 20 per cent, through increase of its alliance with financial institutions, expansion of the customer network through online channels, and addition of service points in the provinces to boost the brand recognition.

According to Sopon, CarTrust has identified multiple groups of competition, mainly the businesses providing advice for refinancing and securing the vehicle registration document. However, banks are CarTrust’s allies rather than competitors.

Among the competitions are Carfinn and Carmana although they are still much smaller than CarTrust.

What makes CarTrust stand out are: 1) Professionalism for customer satisfaction, 2) Better and more services, 3) Reasonable prices, 4) Nationwide coverage, 5) Electronic platform.

Bright business outlook

Thailand’s car market has taken a downturn due to the COVID-19 pandemic. However, Sopon voiced confidence that there is still room for further growth in the domestic second-hand market, as there remains demand for cars, whether they are powered by petrol, diesel, hybrid engine, or electricity.

More than seven years of its existence, CarTrust has retained it constant growth. Pre-COVID, the company helped its customers secure an average Bt100-200 million a month for their car refinancing. It has made profits for five consecutive years.

Expansion of branches and diversification into related businesses has made it necessary for CarTrust to raise funds.

“In two years, CarTrust intends to be listed on the stock exchange. We are making our platform ready. Fund raising will help us expand the business faster,” Sopon said.

“There may be moves for a business merger and expansion of the platform to related businesses, such as online car trade, car care, document delivery, or anything that brings synergy. We aims for more revenue, improved services, and decreased cost of operation.”

After being listed on the stock exchange, CarTrust has plans to expand into other countries in the region, according to Sopon. However, the company is setting its sights on becoming Thailand’s number one in the business before expanding beyond the borders.

“We are unsure if other countries have a platform similar to what we have in Thailand. But we believe that our system for car financing and securing the car registration could prove beneficial to many other countries with a similar structure,” Sopon said.

“Our plan to expand overseas will first focus on the markets with the character similar to that of Thailand and the areas where CarTrust has expertise. We will first look at Southeast Asian countries with a rapid expansion of mature car financing markets. These include Indonesia, Philippines and Vietnam,” he added.

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Regarding its projected growth this year, Sopon said CarTrust is recovering from a decline in business due to COVID-19.

In 2019, the company lent almost Bt1.1 billion to customers seeking funds for refinancing. 2020 saw the amount decline to Bt600 million. The business was slow in early 2021 but a rapid recovery that began in April has continued, sending the company to its all time high in August.

“We should be able to get back to the [pre-COVID] point of Bt1.2 billion this year. Next year, it’s not too difficult to reach Bt2 billion,” Sopon concludes.

FAQs

Why is the second hand car market booming? ›

Faced with long delivery times and a perceived risk of taking public transport due to Covid, many people have turned to the secondhand car market. With fewer cars and more people wanting them, a seller's market has developed.

How is the second hand car market? ›

The latest data from the heycar Used Car Price Index shows that prices for older used cars are on a downward trend in 2022. “That said, there are some rays of light for the industry. Fears of a used car price crash in 2022 appear to be unfounded.

What rights do you have buying a secondhand car? ›

The Act states the car must be “of a satisfactory quality”, “fit for purpose” and “as described”. (For a used car, “satisfactory quality” takes into account the car's age and mileage.) You have a right to reject something faulty and you're entitled to a full refund within 30 days of purchase in most cases.

Why is there a second hand car shortage? ›

Knock-on shortages for the used car market

Shortages for new car supplies have a knock-on effect in the used car market. A lack of new cars right right now inevitably means a lack of near-new used car stock for the next year, and shortages of 1-3 year-old cars for the next few years.

Is the second-hand car market booming? ›

In 2021, the average used car price increased 30%, with some models going up 70%. There have even been instances of used cars being more expensive than their new equivalents. In late 2021, a one-year-old Dacia Sandero was selling for about £2,000 more than the circa-£9,500 price of a new model, for example.

Are second-hand cars selling well? ›

According to new data from Tradesure Insurance, 82 percent of all car sales in 2021 were used vehicles.

Is the second hand car market slowing down? ›

Used-car transactions down in 2022

Used-car markets recovered swiftly to 27.8 million transactions, down merely 5% compared to pre-C0VID-19 year, 2019. In contrast, new-car transactions fell by roughly 25% in 2020 compared to 2019 and ended slightly lower than in 2021.

Are second hand car prices falling? ›

Are all used cars going up in price? The short answer is no. Used car prices went up on average by nearly 30 per cent in 2021, and while it's true demand and high prices are starting to soften in summer 2022, it's going to take a long time for prices to drop by nearly 30 per cent back to where they were.

Are second hand cars getting cheaper? ›

Moody's Analytics this month reported that used-car prices were up 65 per cent in the first quarter of this year compared with the corresponding period in 2019. Prices also rose by 18.4 per cent in the past three months compared with the last quarter of 2021.

Does the Consumer Rights Act apply to second hand cars? ›

The Consumer Rights Act came into force on 1 October 2015 and covers the purchase of goods, digital content and services including new and used cars from official dealers (it doesn't apply to private sales) as well as servicing, repairs and maintenance work. Products must be: Of satisfactory quality.

Do I have any rights when buying a secondhand car privately? ›

If you're buying a car online from a private seller you'll have the same rights as if you'd bought it in person. That is that the car must be of satisfactory quality, fit for purpose and as described.

What are my rights on returning a used car? ›

If there's something wrong with your used car, you might have a legal right to a repair, the cost of a repair, or some or all of your money back. This includes if it's damaged, doesn't work, or doesn't match the advert or description you were given.

Why are second hand cars worth more than new? ›

According to Guess, a tight supply for new vehicles has steered many buyers into the used car market, resulting in record-high prices for used vehicles.

Why are second hand cars more expensive than new ones? ›

And with extended waiting times on new cars, many drivers have turned to the used market. This surge in new demand has now pushed prices to record levels... As a result, car makers have simply been unable to build enough cars to meet demand from customers.

Why are 2nd hand cars more expensive than new? ›

Used cars are being sold for such high prices because there is a greater global shortage of new cars than there has ever been before. In short, the lack of cars was created because car manufacturers stopped ordering as many car parts when the COVID-19 pandemic hit, thinking sales would slow down.

Why is car market so high? ›

The recent spike in car prices is due in part to a computer chip shortage that began during the pandemic. As people spent more time at home and less time commuting, automakers reduced their microchip orders, leading to a subsequent decline in chip production.

Are used cars more expensive now? ›

According to the Consumer Price Index report from July, used-car prices are 6.6 percent higher than last year, although still more than 50 percent higher than they were in February 2020, before pandemic-related disruptions catapulted the economy into turmoil.

What will happen to used car prices in 2022? ›

As new car production gradually ramps up, demand for used cars is expected to moderate. In the U.S., the Manheim Used Vehicle Value Index — which measures the prices dealerships pay for used cars at auctions — hit a high of 236.3 in January 2022 and has since fallen to 219.6 in July 2022.

What's the best car selling? ›

  • 2022 Nissan Sentra. ...
  • 2022 Nissan Altima. ...
  • 2022 Honda Civic. ...
  • 2022 Honda Accord. ...
  • 2022 Toyota Corolla. ...
  • 2022 Toyota Camry. ...
  • More Shopping Tools From U.S. News & World Report. ...
  • Best Selling Cars For 2022. 2022 Lexus ES | $40,800 | First-Quarter Sales: 10,051 | USN Overall Score: 8.2/10.
12 Aug 2022

Are used cars worth it? ›

Buying a used vehicle is a great way to get behind the wheel without shelling out as much as you would for a new vehicle. You will be met with less vehicle depreciation and spend less on insurance and registration while still having peace of mind that your vehicle is in good condition.

How much are used car prices up? ›

That's a 62% jump. The most dramatic increase is for much older vehicles. A 10-year-old (2009) used car in July 2019 had a median price of $7,997. That's now catapulted to $16,331 for a 10-year-old (2012) model in July 2022 — a whopping 104%.

How much have car prices increased? ›

The average cost to own and operate a new car in 2022 has soared about 11% since last year to $10,728 per year (just under $900 per month), according to AAA's annual "Your Driving Costs" report. The report factors in costs such as fuel, depreciation, insurance and maintenance to find total annual operating expenses.

Will second hand car prices come down in UK? ›

When will used car prices drop? Used car prices UK-wide are currently on a downward trend. In the first half of 2022, values have dropped by 5.7%, though this still places it higher than pre-lockdown values. Demand for older vehicles is also starting to slow.

Why are car sales down? ›

Soaring inflation is making people worldwide rethink big-ticket purchases including cars. Meanwhile, supply-chain snags are making it difficult to even find new cars on dealer lots. The result: Auto sales are starting to plummet.

Will used car prices drop in a recession? ›

While car prices have often fallen during previous recessions, analysts predict that this may not be the case this time. In the past, when entering a recession, the U.S. usually had a surplus of unsold trucks and cars, and as demand decreased, they had to lower prices to sell off inventory.

Will used car prices drop in 2022 UK? ›

However, according to the latest Used Car Price Index for September 2022, the average asking price of a three-year-old car was down 10.08% month-on-month (MOM), reversing August's MOM rise of 13.66%. It is the biggest MOM drop heycar has seen this year.

Are new car prices going up? ›

Some cars are marked up as much as 24%

5, 2021. “The market is pretty brutal in terms of pricing,” said Brauer. The average new vehicle is priced 10% above the sticker price, the recent iSeeCars analysis of 1.9 million new car listings found — with some sought-after models marked up much more.

Why are new cars so expensive now? ›

A bunch of related bad economic news has hit car buyers pretty squarely: Rising inflation has pushed prices up, the Federal Reserve's interest rate jumps have pushed auto lending rates higher, and supply chain issues have squeezed the availability of new cars, further driving prices up.

How long will the car shortage last? ›

The issues causing the shortage aren't going away any time soon. Current word is that it will be at least 2 to 3 years before things return to 'normal'. Possibly longer. The 'new normal' is that stores sell all of their stock orders months before they even arrive, so there are few new cars to test drive – or none.

Why are cars so expensive in Australia 2022? ›

Luxury Car Tax (LCT): According to the Australian Taxation Office (ATO), once an imported car's price crosses a certain threshold ($71,849, or $84,916 for a fuel-efficient vehicle as of FY 2022-23), LCT comes into effect, costing 33% of the car's value.

How consumer's rights are protected if consumer purchase product on second hand market? ›

Under the Consumer Guarantees Act (CGA), you have more legal rights if you buy from a second-hand dealer or a charity shop than if you buy from a private seller. However, if a charity gives you items for your benefit, eg food from a food bank, then you are not covered by the CGA guarantees.

What is the Consumer Rights Act and how does it affect my vehicle purchase? ›

The Consumer Rights Act 2015 gives you the right to ask for a full refund in the first 30 days after buying any product that proves to be faulty, including a new or used car. The law also provides protection for servicing and repair work that renders your car faulty.

What can consumers reasonably expect under the Consumer Rights Act when they purchase a vehicle? ›

It is therefore important that dealerships meet what consumers can reasonably expect, namely that: The vehicle is of satisfactory quality. The vehicle is fit for purpose. The vehicle is as described.

How do I protect myself from buying a car privately? ›

7 Tips to Protect Yourself When Buying a Used Car Privately
  1. Ask questions about the car you found online. ...
  2. Take a knowledgeable friend or family member with you. ...
  3. Have the car inspected. ...
  4. Check the car's history. ...
  5. Match the seller's driver's license with the title. ...
  6. Use caution when sellers mention family or friends.

How do you reject a used car? ›

The first is to stop using it. If the car's not fit for purpose, you shouldn't still be using it as a runaround, as this will severely weaken your case. Next, write to the supplying dealer giving your reasons for rejection. This should be within the first six months of ownership and outline the case so far.

Can you sell a car privately sold as seen? ›

When you sell a used car privately it is important to provide the buyer with a 'sold as seen, tried and approved without guarantee' receipt. You should bear in mind that this doesn't affect the buyer's legal rights – the car must match any description that you give in writing or verbally in the course of the sale.

How many rights does a consumer have under the car? ›

The Consumer Protection Act passed in 1986 guarantees 8 rights to consumers. These include the Right to safety, Right to be informed, Right to choose, Right to consumer education, Right to be heard, Right to seek redressal, Right to basic needs, and the Right to healthy environment. Q. Q.

How do you reject a car under the Consumer Rights Act? ›

Under the Consumer Rights Act 2015, you have a short term right to reject your car if it is of unsatisfactory quality, unfit for purpose or not as described. You can get a full refund. However, you should remember that this right is short-term and is only limited to 30 days from the date you brought your car.

How long have you got to return a used car? ›

Your rights when buying a used car from a dealership

If you've bought a used motor from a dealership, you have the right to return the car within the first 30 days of purchase.

Will second hand car prices drop in 2022? ›

Used car prices are already starting to drop as the market cools, having seemingly peaked in early 2022. On the other hand, new vehicle prices are unlikely to drop in 2022 due to persistent inflationary pressures.

Is now a good time to buy a used car UK 2022? ›

Used car prices have been strong in 2022 with the global semiconductor shortage continuing to cause widespread disruption to the supply of new vehicles in the UK.

Why are car prices so high right now? ›

The recent spike in car prices is due in part to a computer chip shortage that began during the pandemic. As people spent more time at home and less time commuting, automakers reduced their microchip orders, leading to a subsequent decline in chip production.

Are used car prices going to drop? ›

Don't expect car prices to drop significantly anytime soon. Instead, new-vehicle prices — already at record highs — will remain elevated, automotive experts say. At the same time, used-vehicle pricing should moderate as the Federal Reserve continues raising interest rates to curb inflation.

Is the second hand car market slowing down? ›

Used-car transactions down in 2022

Used-car markets recovered swiftly to 27.8 million transactions, down merely 5% compared to pre-C0VID-19 year, 2019. In contrast, new-car transactions fell by roughly 25% in 2020 compared to 2019 and ended slightly lower than in 2021.

How much are used car prices up? ›

According to data released by the U.S. Bureau of Labor Statistics on Thursday, the consumer price index for used cars and trucks jumped up by 40.5% from January 2021 to January 2022. That means within a year, the average price of used cars and trucks for urban consumers has gone up by 40.5%.

Are new cars more expensive now? ›

Since the beginning of the Covid-19 pandemic, new and used car prices have risen dramatically, leaving buyers with limited choices for finding affordable vehicles. According to Kelley Blue Book, the average price of a new car reached an all-time high of $48,301 in August — up nearly 11% compared to last year.

Should I buy 2022 new car? ›

While soaring used car prices are bad for those who can't afford a new car, they may mean 2022 is a good time to buy a car for those with a vehicle to trade in. A high trade-in price means added capital that can help reduce the finance share of purchasing a new car.

Will cars get cheaper? ›

Used-Car Prices Will Drop: Here's How to Prepare. As new-car inventory begins to stabilize, J.D. Power forecasts that used-vehicle values will begin their descent to more normal levels by late 2022 and into 2023. “We do expect used prices to cool once new-vehicle production and inventories begin to recover,” Paris said ...

When should I buy a new car? ›

End of the year, month and model year. In terms of the best time of the year, October, November and December are safe bets. Car dealerships have sales quotas, which typically break down into yearly, quarterly and monthly sales goals. All three goals begin to come together late in the year.

Will used car prices continue to rise? ›

"J.D. Power is beginning to see some early improvements in production, which should continue over the second half of this year." says Paris. "However, despite improving new vehicle production, retail inventory on the ground remains extremely tight which will keep new and used vehicle prices high throughout 2022."

Will car prices Drop in India? ›

Car prices are unlikely to come down and companies will take this opportunity to improve their margins, says Deven Choksey of KR Choksey Securities.

Will prices go back down? ›

“Projected inflation levels over the next five years range from 2.3%-2.9%, so prices shouldn't stay elevated as they are indefinitely,” Rosen said. “We expect to see decreases across the board as we go into 2023 and should hope to end 2023 around 3% inflation.”

Is new vehicle inventory improving? ›

New car supply growth

According to KBB, at the end of August, America's new car dealers had 1.2 million new cars in stock. Although that might not sound that high, the last time car inventory reached that number was in June of 2021. New car dealer supply is roughly one-third higher than it was this time last year.

Do used car prices go down in a recession? ›

While car prices have often fallen during previous recessions, analysts predict that this may not be the case this time. In the past, when entering a recession, the U.S. usually had a surplus of unsold trucks and cars, and as demand decreased, they had to lower prices to sell off inventory.

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