PATTAYA, Thailand – The used car market is facing significant challenges due to stringent loan policies from financial institutions. These measures have led to a decline in used car sales, with some dealerships forced to sell at a loss. The rising popularity of electric vehicles (EVs) has further compounded the market downturn.
Paisan Kasemsantitham, executive of Zunn Auto Center, reports that stricter loan conditions, aimed at addressing high levels of bad debt and outstanding payments, have severely impacted sales. His dealership is among those struggling, having to drastically cut expenses and reduce risks due to lower monthly sales.
Before the COVID-19 pandemic, Paisan’s dealership sold around 50-60 used cars per month across three branches. Now, sales have dropped to about 20 cars per month, with some months falling short of even that. To cope, the business has reduced its branches from three to one to cut costs, each branch previously costing 200,000-300,000 baht monthly. The stock of cars has also been cut from 150-200 units to just 70-80 units, with some cars sold at a loss to stay viable. Additionally, dealerships face significant interest expenses on borrowed funds.
Paisan noted that stricter finance conditions include a one-time blacklist check policy, making it difficult for many buyers to secure loans. Buyers now need a strong repayment history and stable income from a company or partnership. Those with cash-based income sources often fail to meet loan approval criteria, making credit access much harder.
Another factor affecting the second-hand car industry is the surge in EV imports in 2023-2024, causing significant market volatility. The resale value of second-hand cars has plummeted across nearly all models and brands, including high-end ones. Some dealerships have stopped accepting certain brands altogether due to fears of unsellable inventory and potential losses.
