Romania exports back leased cars, at half the price

Leasing companies are willing to risk losses of up to 50 percent for cars returned by their clients who are unwilling or unable to continue making their installment payments. Following the auto import boom, which lasted until 2008, and contributed massively to the trade and current account deficits, Romania is now paying the price, which translates into the depreciation of the national currency, an increase in interest rates, and a decline in revenues. The stocks of leasing companies exceeded 10,000 cars returned at the end of the first half of 2009.

Leasing companies are selling cars on the local and foreign markets in "packages" of at least four cars, for prices 40-50 percent lower than prices initially paid in 2008, according to representatives of the leasing market, in a survey by the NewsIn agency. "The prices of cars generally fell an average 40-50 percent compared to 2008, which is why leasing companies often sell the recovered cars at a loss," the General Manager of Impuls Leasing, Razvan Diaconescu, told NewsIn.

On the other hand, if leasing companies try to hold on to the recovered cars too long, in the hopes of obtaining a better price, their storage and maintenance costs are rising, while the car's market value is dropping anyway, given the fact that it gets older with every passing day. The cost for a car "stored" in an auto park is of some €50 per month (VAT not included), but companies parking over 20 cars can benefit from discounts of up to €35-40 per car.

money.ro