In Belarus, motorists will be able to buy new cars in exchange for the old ones from May 1. This is provided by a presidential decree №130, enabling auto dealers to use the system trade-in from May 1, which hasn't been advantageous for them so far. According to the general director of the Belarusian Automobile Association (BAA) Ludmila Shabanova, all this will help to ensure the used-car market in Belarus would become more civilized and come out of the shadows.
«This will be an incentive for domestic market sales of new and used cars and will make the market more official. In this case market of used cars will not disappear. Just the opposite, it will remain and become more civilized, will come out of the shadows,» Ludmila Shabanova told to Telegraf journalist.
According to BAA CEO, development of new direction takes time and money. Government still has to develop a legal framework and other measures in connection with the adoption of the decree, while car dealers — to invest in promising new directions. Speaking about the time when trade-in system will be able to work fully in Belarus, BAA Director General mad no predictions: «Let us not anticipate. It’s, certainly, preferable to make it work as soon as possible as it is in the interests of bothdealers and buyers.
«In the West, the buyer comes in, changes his old car into a new one and happily returns home … And we will need time and investment for this purpose…» — said Ludmila Shabanova, adding that this would encourage car park in Belarus. «This is a tremendous prospect, the domestic market and the market, which will operate inside the country — for the Belarusian money,» noted the CEO.
Trade-in to Save Buyers from Headache
Ludmila Shabanova also noted that a car purchase from a dealer will give customers a guarantee of «purchase trustworthiness» and «liberate the user from the headaches in selling his old car.» Talking about whether there will be demand for trade-in system and whether the Belarusians will continue, as before, to sell their cars in the market themselves, spending time and effort to find a buyer, BAA CEO said: «Everything depends on the consumer — whether to go on a spontaneous market for buying «a pig in a poke,» or to go to auto dealers and be sure to buy a new car.»
According to her, it is possible that one will have to invest much more in a car in view of its technical condition if buying a car on a spontaneous market. «One can avoid these problems with dealers. Even when buying used cars one can have reliability …,» said Ludmila Shabanova, noting again that the decree № 130 «stimulates the development of new markets and market of used cars.»
BAA CEO believes that this will provide an opportunity for the so-called auto-houses, typical of Europe, to appear in Belarus.
Talking about the pricing policy and some people’s beliefs that the trade-in introduction will make car prices fall or rise, Ludmila Shabanova stressed that the decrees couldn’t lead to a reduction or rise in car price. «The market will dictate the price, she said. — It regulates the supply and demand and the final price of the goods.»
Trade-in to Increase our Stock of Cars, Car Dealers
According to Ludmila Shabanova, traide-in will help auto dealers to expand their portfolio of services that they provide to clients. Car dealers themselves are of the same opinion. «The new rules will make it possible to buy out cars from individuals, which will significantly increase our warehouse of used cars and create even more choice to our customers,» told in the auto center «Atlant-M Sukharev,» which is the official dealer for VOLKSWAGEN AG in Belarus.
It’s now unprofitable for car dealers to use trade-in system, when they pay VAT on the full cost of the car. The adoption of the decree will let dealers pay VAT on difference between the purchasing car price and its selling price.
Having chosen a car, the customer leaves his used car to a dealer for its diagnosis and assessment. The car price is determined by the technical condition of the vehicle and, if the car dealer and the customer are satisfied, the price of the old car is deducted from the price of the replacement, the buyer pays extra residue and leaves in his new car. If the buyer is against the deal, he will have to pay only for the service diagnostics.
In turn, some motorists are skeptical about the innovations that have long been common in other countries, assuming that the dealers «will not treat themselves badly,» underestimating the price of the car in the diagnosis, and therefore will be faithful to the old methods: to buy and sell cars through ads and standing on the market.
As Telegraf previously reported, the decree № 130 on the introduction of trade-in system in Belarus was signed by President of Belarus Alexander Lukashenko on April 4.
Car companies will still have to solve many issues related the trade-in implementation. In particular, it is still unclear what kind of warranty should be provided for used cars, where they should be stored, how to look for a buyer, as well as how should dealers’ cars be insured in case of return of such vehicles under warranty.
In turn, the Council of Ministers will have a two-month period to provide the legislative acts in conformity with the decree and other measures on its implementation.
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