New Car Price Cuts Trigger Used Car Market Collapse, Dealers Across Regions Lose Over $14,000

According to feedback from used-car dealers, prices of premium used internal combustion engine vehicles have continued to decline due to the ongoing price war in the new car market. Taking the BMW 5 Series as an example, one dealer reported a loss of RMB 60,000 on a vehicle purchased at a high price just four months ago. For some BBA (BMW, Benz, Audi) models, acquisition prices paid by dealers now exceed current market resale values—some units are even difficult to sell despite losses of up to RMB 100,000. Since the beginning of this year, BMW has adjusted prices for 31 core models, with certain high-end variants seeing maximum reductions of RMB 301,000. Mercedes-Benz has slashed prices across its entire lineup by approximately 10%. The official manufacturer’s suggested retail price (MSRP) for the BMW 525Li stands at RMB 368,000, yet its actual transaction price (excluding options and incentives) has dropped to between RMB 265,000 and RMB 280,000. Industry data shows that for every RMB 10,000 reduction in new car prices, corresponding used cars must drop by RMB 15,000 to remain sellable. In some cases, brand-new cars now cost RMB 20,000 less than nearly identical used models—a phenomenon known as "price inversion." Used-car dealers in cities like Changsha report that models such as the BMW Z4 and Land Rover Range Rover have lost over RMB 200,000 in value within two years, while the Porsche Cayenne’s price has nearly halved after three years. According to data from the China Automobile Dealers Association, national used-car transactions reached 4.822 million units in the first quarter of 2026, up 4.66% year-over-year. However, average transaction prices per vehicle have declined, prompting dealers to adopt aggressive discounting strategies to clear inventory. Currently, dealers base their used-car acquisition decisions on the terminal market prices of equivalent new models. A used car typically becomes attractive to buyers only when priced RMB 30,000–50,000 below its new counterpart—but this margin often fails to cover acquisition costs and reconditioning expenses.