Let’s be honest: The Egyptian consumer always pays more and gets less. This is whether the issue is the quality of a car or service or the actual value of the car compared to its real retail value in Europe or the US. Egyptian car consumers have had to live with this situation but in the past months and with inflation increasing every day, it›s gotten worse as many people reached a point where they no longer can afford the car they want.
The market of pre-owned cars has flourished since brand new ones became out of reach due to low supply and unrealistic prices. But again the prices of pre-owned cars went up, especially Class A like Mercedes and BMW, because it would be hard for someone to sell his old Mercedes and buy a lower grade car brand. Either sell it for a high price or keep it.
Since the floating of the Egyptian pound late last year and the subsequent rush to buy a car before its inevitable cost increase, dealers have been decreasing supply, exactly what happens in the stock market when a rumour plays with the curves of the stocks.
Tariffs on imported European cars are set to decrease 10 per cent by the start of 2017. When the current stock of cars at dealers is sold out, new imports will get the advantage of the 10 per cent decrease. Parallel to that is that the value of the Egyptian pound is also expected to improve daily in the first quarter of 2017.
So, selling your car with a good price today and keeping the money until the cost of new cars returns to normal is one way to go. Keeping a firm hold on your car until the market stabilises is another route.
Beware that the current prices do not represent the real value of the car, meaning that when the market recovers, the difference that will be cut from the new car you bought during inflation will go with the wind. If you don’t have to, don’t.