Car values in Latvia are falling so fast that
existing operating leases are causing big problems for the Baltic
state’s dealerships.
existing operating leases are causing big problems for the Baltic
state’s dealerships.
According to Latvian Authorized Car Dealer
Association president Aksels Rubulis, “Operating leasing
agreements, [where] after four years car dealers have to buy back
the car for 40 percent of its initial value, now cause losses to
dealers. In the current market development, the value of these cars
is not higher than 20 percent of the sum, but the money has to be
paid on the basis of these agreements.”
Association president Aksels Rubulis, “Operating leasing
agreements, [where] after four years car dealers have to buy back
the car for 40 percent of its initial value, now cause losses to
dealers. In the current market development, the value of these cars
is not higher than 20 percent of the sum, but the money has to be
paid on the basis of these agreements.”
He said that these types of agreement had been written by
dealers in serious need of increasing sales, but that the
loss-making leases might now be the “last obstacle” for struggling
dealers.
Rubulis commented that around 70 percent of Latvia’s cars had
been purchased through leasing, with an unknown proportion being on
operating lease.
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Latvia registered 494 new cars in January, compared to around
2,200 during the same month last year.
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