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LIFE IN SPAIN

Why you should think twice about buying a car in Spain, even if it’s second hand

A combination of supply and demand problems caused by the pandemic and a lack of microchips is making cars much harder to come by in Spain. Here's why you should perhaps consider holding off on buying that vehicle you had in mind for now.

buying a car in spain becoming harder
If you're looking to buy a second-hand car in Spain, keep in mind that the reduced production and scarcity of new models is causing second-hand prices to shoot up. Photo by SPENCER PLATT / GETTY IMAGES NORTH AMERICA / Getty Images via AFP)

Getting your hands on a car – new, second hand, or even rental – is becoming much harder and more expensive in Spain.

The car industry has been hit by a perfect storm of conditions that have made new cars harder to come by and, as a result, caused prices to rapidly increase. 

According to Spain’s main consumer organisation, Organización de Consumidores y Usuarios (OCU), the microchip crisis affecting the entire globe, combined with an overall increase in the price of materials needed for car manufacturing and increased carbon emissions legislation has created a shortage of new cars in the country.

New cars

With less cars being manufactured, prices of new cars have gone up: a recent OCU report reports that new car prices have increased by 35 percent, higher even than Spain’s record breaking inflation levels in recent months. 

READ ALSO: Rate of inflation in Spain reaches highest level in 37 years

It is a shortage of microchips and semiconductors – a global problem – that has caused car production in Spain to plummet. In the first eight months of 2021, for example, production fell by 25.3 percent compared to 2019.

This is not a uniquely Spanish problem, however. The entire world is experiencing a shortage of semiconductor microchips, something essential to car manufacturing as each car needs between 200 to 400 microchips.

France’s car exports, for example, have fallen by 23.3 percent, Germany’s by 27 percent, and the UK’s by 27.5 percent.

Simply put, with less cars being produced and specialist and raw materials now more expensive, the costs are being passed onto consumers the world over.

Equally, these industry-specific problems were compounded by the COVID-19 pandemic.The average wait for a car to be delivered in Spain is now around four months, double what it was before the pandemic, and depending on the make and model you buy, it can be as long as a year.

Car dealerships across Spain were forced to sell cars during the pandemic to stay afloat, and now, when consumers want to purchase new cars, they don’t have enough to sell and can’t buy enough to keep up with demand due to the materials shortages that have kneecapped production.

Second-hand cars

With the scarcity and increased prices in the new car market, the effect is also being felt in the second-hand car market too. With many in Spain emerging from the pandemic facing precarious financial situations, then compounded by spiralling inflation in recent months, one would assume many would go for a cheaper, second hand option.

Yet, even second-hand prices are out of control. In Spain, the price of used cars have risen by 17 percent on average so far in 2022.

Cars 15 years old or more are 36 percent more expensive than they were in the first half of last year. The average price of a 15 year old car is now €3,950 but in 2021 was just €2,900 – a whopping increase of 36 percent.

As production has decreased overall, purchases of used models up to three years old have declined by 38.3 percent. Purchases of cars over 15 years old, on the other hand, have surged by 10.4 percent.

If you’re looking to buy a second-hand car in Spain, keep in mind that the reduced production and scarcity of new models is causing second-hand prices to shoot up.

Rental cars

These problems in car manufacturing have even passed down to car rentals and are affecting holidaymakers in Spain.

Visitors to Spain who want to hire a car will have a hard time trying to get hold of one this summer, unless they book well in advance and are willing to fork out a lot of money.

Over the past two years, since the start of the Covid-19 pandemic, there has been a shortage in rental cars in Spain. However, during peak holiday times such as Easter, the issue has been brought to the forefront.

It’s now common in Spain to see car rental companies hanging up signs saying “no hay coches” or no cars, similar to the no vacancy signs seen in bed & breakfasts and hotels.

READ ALSO: Why you now need to book a rental car in advance in Spain

While all of Spain is currently experiencing car rental shortages, the problem is particularly affecting areas of Spain with high numbers of tourists such as the Costa del Sol, the Balearic Islands and the Canaries.

According to the employers’ associations of the Balearic Islands, Aevab and Baleval, there are 50,000 fewer rental cars across the islands than before the pandemic.

In the Canary Islands, there is a similar problem. Occupancy rates close to 90 percent have overwhelmed car rental companies. The Association of Canary Vehicle Rental Companies (Aecav) says that they too have a scarcity 50,000 vehicles, but to meet current demand, they estimate they would need at least 65,000.

According to Spain’s National Statistics Institute (INE), fewer than 20 million foreign tourists visited Spain in 2020 and revenues in the sector plummeted by more than 75 percent. While numbers did rise in 2021, the country still only welcomed 31.1 million foreign visitors last year, well below pre-pandemic levels and far short of the government’s target.

Many Spanish car rental companies have admitted that the fleet they offer is down to half after selling off vehicles in the pandemic due to the lack of demand.

End in sight?

With the microchip shortage expected to last until at least 2023, possibly even until 2024, it seems that the best course of action if you’re looking to buy a new or used car in Spain is to wait, let the market resettle, and wait for prices to start going down again.

If you’re hoping to rent a car when holidaying in Spain, be sure to book well in advance.

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LIFE IN SPAIN

More foreigners and people living alone: What Spain will be like in the future

Within three decades, new data reveals that there will continue to be more deaths than births in Spain, population growth will be mainly due to immigration and a third of all households will be occupied by a single person.

More foreigners and people living alone: What Spain will be like in the future

Spain’s National Statistics Institute (INE) has released a report revealing what the country will look like all the way up to 2074. The figures have been based on how the population will evolve if current demographic trends continue.

Spain’s population will grow by five million

Spain currently has 48,692,804 inhabitants, but this number is set to grow by an extra 5 million by 2039. It’s important to note that the growth will not be equal across the country, and will only focus on specific areas. Much of the country will continue to suffer from depopulation.

Catalonia and Madrid will be the two regions with the greatest growth, with nearly 1.2 million and one million respectively. The greatest relative increases, however, will be recorded in the Balearic Islands (19.0 percent), Valencia (19 percent ) and Murcia (17.2 percent).

On the other hand, the steepest declines will be seen in Asturias (-4.1 percent), Extremadura (-3.4 percent) and Castilla y León (-0.7 percent).

READ ALSO: Growing number of foreigners drives Spain’s population rise

28 percent of the population will be over 65

Spain’s population is growing older and older, and by 2042, 28 percent will be over age 65 compared to the current 20.4 percent. Fast forward to 2055, and this will reach 30.5 percent.

Six percent of the population of Spain has already turned 80, but in 2074 this will double, reaching 12.3 percent. And within 15 years the number of even older people will practically triple. Centenarians will exceed 46,000 compared to nearly 17,000 this year.

Birthrates will increase

Spain’s birthrate has been in decline over recent years, but starting this year, it will begin to grow until 2042. The data predicts that 5.5 million children will be born in the next 15 years,  and the average number of children per woman will grow slightly, going from 1.16 registered this year to 1.24 in 2038.

In 2042, birthrates will begin to fall again, but from 2058 they will rise once more, due to more people having reached fertile ages. The number of births is also thought to be boosted by immigration, with more and more foreigners moving here and having children too.

But, the 5.5 million babies predicted to be born here between 2024 and 2038, will still be 8.7 less than those born in the previous 15 years.

Over a quarter of the population will have been born outside Spain

Spain’s population will not only grow thanks to increasing birthrates but more so because of the numbers of foreigners continuing to move here.

By 2039, the INE predicts that a total of 28.7 percent of the people living in Spain will have been born outside of the country. And by 2074 that figure will reach 39 percent.

This means the population born in Spain is set to gradually decrease, going from 81.9 percent today to 61 percent within 50 years.

READ ALSO: Spain needs 25 million foreign workers to keep its pensions afloat

7.7 million will live alone

It seems that Spaniards are increasingly choosing to live or will be forced to live on their own, with stats revealing that by 2039, one-third of households in the country will only be occupied by a single person.

This equates to 7.7 million single-person homes, compared to the current 5.4 million. In fact, in 2039 the most common type of household will be that of a single person – 33.5 percent of the total, ahead of the 31 percent of two-person households.