Used car prices skyrocket in Lithuania after euro adoption

Prices of used cars in Lithuania jumped by almost a fifth on average in the second quarter due to euro adoption, harming the growth of the market, shows a research published on Monday.

According to the research from auto.plius.lt, the biggest motor advertisement website in Lithuania, the average price of a used car in Lithuania amounted to 3,600 euros (about 3,960 U.S. dollars) in the second quarter, 18.2 percent up from the same period last year.

Viktoras Dauksas, head of auto.plius.lt development, said the change was unexpected compared to forecasts of 5-7 percent inflation at the start of the year.

"The vendors took advantage of the currency changeover to the euro and increased the prices," said Dauksas in a press release.

The oldest cars, manufactured 16-20 years ago, saw their prices increasing the most. The average price of these cars rose to 1,300 euros, or by 36.5 percent from the second quarter last year.

Cars made 11-15 years ago are the most popular in Lithuania with 33 percent of all deals in the second quarter. Their prices increased by 26.1 percent compared to the second quarter last year.

Dauksas noted, however, further sharp increase in prices of used cars is unlikely, since the current developments in prices have harmed the market activity.

"We had seen the market growing and strengthening for five years, but statistics for the second quarter were noticeably worse," said Dauksas.

A number of 94,700 used and new cars have been sold during the second quarter, 7.8 percent down from the same period a year ago. Lithuanian car market had seen its market activity dropping by 11 percent in the first quarter, compared to the same quarter last year.

Lithuania, a small Baltic country, adopted euro on Jan. 1, 2015, becoming the 19th member of the single currency area. Endit