[Car Tips] Differences between Hong Kong's new and used car markets
🚗 Let me tell you: Buying a car in Hong Kong is actually a major project in life.
Hong Kong's land is scarce and its population is dense. Parking is expensive, fuel costs are high, and the First Registration Tax (FRT) controls vehicle numbers. Coupled with the recent shift in electric vehicle policies, the new and used car markets have their own distinct ecosystems. It's not just a matter of price; factors such as value retention , usage , and age must also be considered.
1️⃣ Price difference – the price of new cars and used cars
New car
- The price is directly determined by the brand and model, and the first registration tax (FRT) must be added.
- First Registration Tax for Private Cars = Tiered levy based on vehicle price (up to 115%)
- For example , a Japanese family car (under 2200cc) can start at $250,000, while a European mid-size SUV can easily cost over $600,000.
Used Cars
- No need to pay FRT (already paid by the first owner), so the starting price is much lower
- The second-hand price is determined by the age, mileage, condition, and brand value retention.
- For example , a 5-year-old Japanese car may only cost half the price of a new car; however, European cars depreciate quickly, and may have dropped by 40%-50% in 3 years.
Editor's opinion : Most of the cars with the fastest price drops in Hong Kong are European cars (especially luxury brands). If you're looking for a bargain, you can look at the used market. However, some Japanese cars or SUVs with good value retention are not ridiculously cheap even when they're used.
2️⃣ Supply source - How to buy a car?
New car
- Mainly from official agents (Franchise Dealer) or parallel importers (Parallel Import )
- The dealership car has the same brand support as the original Hong Kong factory, but the price is higher.
- Parallel imports are generally cheaper, but maintenance and parts require third-party services.
Used Cars
- Diversified sources: used car dealerships, auctions, private transfers, and returned leases
- Some are trade-in replacements that fall on the second-hand market, while others are sold by rental companies or drivers upon retirement.
- Trap : Some accident or flooded cars are refurbished and sold. They look great on the outside, but they have many hidden problems inside.
3️⃣ Quality and condition – why is there such a difference?
New car
✅ Completely zero mileage✅ Latest year of production, latest technology and equipment✅ Clear maintenance records, calculated from the time of delivery
Used Cars
🔹 Car conditions vary greatly - one car of the same vintage may be well-maintained while another is on the verge of a major overhaul. 🔹 Mileage can affect the lifespan, especially in Hong Kong where traffic is a major issue. Although mileage isn't as high as in other countries, stop-and-go driving can still damage your car. 🔹 Check the Vehicle History Report to ensure there are no major accidents.
📌Editor 's advice : When buying a used car, be sure to inspect it. Don't just look at the exterior. Some accident welds are located on the chassis and are difficult for ordinary people to detect.
4️⃣ Tax and policy impact
- First Registration Tax (FRT) : only affects new cars (or parallel imported cars registered in Hong Kong for the first time)
- One-for-one program (previously launched for electric vehicles): Policy changes will significantly affect the demand for new cars in the market
- First registration tax incentive for electric vehicles : directly determines the price difference between new and used electric vehicles
📌 If the policy discount has just ended, the price of new cars will usually become immediately higher, and used electric cars will be relatively attractive.
5️⃣ Repair and maintenance costs
New car
- Most of them have original maintenance (free or low-cost) in the first 3-5 years, and the failure rate is low
- As long as you follow the maintenance manual, there will not be any big surprise expenses
Used Cars
- Depending on the age and type of vehicle, vehicles older than 3 years will need to have their wearing parts replaced (shock absorbers, transmission fluid, electronic components).
- European cars have expensive parts and labor, and high maintenance costs; Japanese cars are relatively affordable and reliable
- Without factory insurance, you have to bear all the repair costs yourself
6️⃣ Depreciation and value retention rate
- New cars : Price drops as soon as they are delivered, with depreciation of 10%–20% a year being common, with the heaviest losses occurring in the first year.
- Used cars : The first few years have already seen the greatest depreciation, after which the decline slows down. Luxury European cars have seen the fastest declines; Japanese family cars like Toyota and Honda have high value retention rates. Electric vehicles, on the other hand, depend on battery degradation and market policy fluctuations.
7️⃣ Car buying experience and psychological factors
New car
❤️ Get a "first-hand experience" and choose your own color and features for a fresh feel❤️ No need to worry about the previous owner's bad driving habits⚠️ High prices and a waiting period for shipping (popular models may take several months)
Used Cars
💰 Great value, lots of choices, buy and use right away💔 I don't know how the previous owner used it, maybe the safety system was disabled for a long time or they drove rudely⚠️ It takes time to verify the documents, maintenance records, and actual vehicle condition
8️⃣ Editor’s Tips – Choose the one that suits you?
- Limited budget → Look for used Japanese cars with good value retention
- Want the latest technology and safety features → New car or a demo car less than 1 year old
- Don't mind spending time inspecting cars to find bargains → Used luxury European cars can be bought at half price
- I drive less and want to replace my car after a few years → Used cars are more cost-effective because they have less depreciation pressure.
❤️ Summary
📌New cars : Expensive but reliable, with the latest technology and worry-free maintenance. The downside is that the price drops as soon as they are delivered. 📌Used cars : Affordable, wide selection, slow depreciation, but the condition of the car is greatly affected by the previous owner's maintenance. 📌 Due to the Hong Kong market's tax system, limited land and large number of cars, as well as policy changes, the price difference between new and used cars can sometimes be abnormal (for example, a used electric car is half the price of a new one).
