The main benefit of buying a car from America lies in the low cost of the car itself at auction due to the presence of damage. Consequently, the amount of customs payments also decreases.
As a result, even with additional costs such as auction fees, delivery, and repairs, the final price still does not exceed the average market value of a car in Ukraine. However, by the end of 2022, this may come to an end due to certain changes and difficulties. As a result, cars from the USA will lose their main advantage - significant savings compared to other ways of purchasing cars in Ukraine.
Experts from the company W8 Shipping - the largest supplier of cars from America to Ukraine, which managed to deliver more than 31,000 used cars to our country in 2021, spoke about possible problems that could lead to higher prices for cars from the USA.
W8 Shipping highlights several factors that could radically change the market for American cars. The cause was the so-called trade war between America and China. Starting January 23, 2018, the then US President Donald Trump began imposing a number of taxes on the import of goods from the "Celestial Empire." Closer to mid-year, China began to respond by imposing customs duties on products from the States.
However, the main problem began to emerge closer to 2020, when the Covid-19 pandemic affected the whole world. It was from this moment that more serious manifestations of enmity between the states began. They affected many areas, but now we will only raise the issue that directly relates to the cost of American cars in Ukraine.
Why might cars from the USA become more expensive?
Since the partial exit of the world from lockdown, the port system in the USA has begun to suffer seriously. Several factors influenced it. First of all, it is a shortage of human resources, which were reduced during the lockdown and did not have time to recover. Now, an outbreak of the Omicron virus has been added to everything, which also led to staff reductions. As a result, serious delays began in the largest ports of America, which, by the way, are still present today.
If we talk about more significant reasons, the shortage of dry cargo containers played a significant role here. The fact is that 98% of the world's total container volume is produced in China, 82% of which comes from the 3 largest enterprises. Today, all of them have significantly reduced production volumes to increase the market value of one container. As a result, a small deficit has formed.
At the same time, Chinese companies that supply their goods to the USA began to offer a higher cost for delivering cargo to America. That would be fine, but at some point their offer became so interesting to shipping companies that it became profitable for them to carry an empty container to China, and then return it with goods back to the USA.
This fact influenced the policy of many shipping lines, which reoriented their main vessels to the Chinese direction. At the same time, today, the epidemiological situation in China has also made its own adjustments to the work of ports, which led to disruptions in the vessel loading schedule.
And in US ports, large queues of container ships are still accumulating, which simply do not have time to unload and load on time. In this regard, the American side decides to hold an auction for unloading. In simple terms, whichever ship pays more for unloading is the one that enters the terminal. And given the volumes of supplies and the margin of ships arriving in the USA from China, it is not difficult to guess who gets priority.
And so, gradually getting to the point, we can already predict today in which direction the cost of cars from the USA will shift if all this fuss continues to develop in the same vein.
First of all, we get a serious delivery delay. Those vessels that are loaded in the European direction may simply be asked to leave the terminal unloaded, since a large ship from China needs to be unloaded, and only then can the process be completed. As for the logistics of cars across the USA, it is arranged in such a way that if a delay occurs at some stage, then all other processes also stop. Despite the fact that each of the 6 W8 Shipping sites can hold up to 1500 cars, if they are not shipped on time, the sites simply become overcrowded.
Hence the first reason for price increases, which lies in the so-called "storages" of auctions - daily payment for downtime of cars that simply have nowhere to take due to a delay in the port.
The next reason for the rise in car prices is the increase in delivery costs. Everything here lies in shipping companies. Since China pays much more for cargo delivery, many large players have thrown all their efforts there. Thus, the remaining ones got the opportunity to work almost without competition, which allows them to dictate new prices for delivery. This also includes the shortage of containers, which also affects the final cost of shipping a car.
In addition, due to the economic crisis in America, car transportation is also gradually becoming more expensive. This also affects insurance auctions, which over the past two years have already raised auction fees several times.
The icing on the cake in this whole epic is the growing demand for used cars worldwide. Not only is the number of people wanting to buy a unique American car at US auctions increasing from all over the world, but Americans themselves have become more willing to buy cars with minor damage. As you might guess, given the absence of costs such as transportation, customs clearance, certification, brokerage services, and so on, US residents can offer a much higher bid for a car at auction.
Moreover, insurance companies themselves are now much more carefully assessing cars, sending more and more "live" cars for repair and resale, whereas just a year ago almost every car was indiscriminately written off and went under the hammer.
When could this happen?
W8 Shipping states that a drastic price increase is not expected until the end of this summer, thanks to a number of timely actions taken. However, if this situation does not resolve by the end of 2022, then in 2023 the cost of a car from the USA will tend to the market value of used cars on the domestic market of the country. And this means only one thing - used cars in Ukraine may follow the same path of price increases that secondary markets in many countries of the world, including America itself, have taken.
To convey the current cost of cars to buyers, the W8 Shipping website has posted current prices for most models that can be ordered from the USA. This makes it easy to choose a car for your budget without resorting to experts. There are also calculations of delivery and customs clearance for each specific car.
