‘Give back the car, but keep paying!’

Thursday morning, the schedule at the Athens county court shows 70 cases of claims by credit firms against car owners. The car ownership «bubble» has burst. In the past four months alone, 35,000 cars have been repossessed. Credit companies last year sent tens of thousands of car owners to court, and car sales dropped 10 percent compared to 2001 (268,489 cars sold compared to 292,025 the previous year), a trend which market experts believe will continue for the next two or three years. At least 60 percent of all cars sold are estimated to be paid for via the installment plan, especially for cars costing up to 7 million drachmas. Most repossessions concerned cars in the 4-4.5-million-drachma range, purchased in installments over 60 months, an attractive system that has, however, ensnared many buyers, companies and banks. Buyers eventually end up paying 65 percent more than the real value of the car. If the vehicle is repossessed, they have to pay a heavy price. According to a market source, a car that costs up to 4.5 million drachmas loses 25 percent of its value within the first year and then another 5 percent every subsequent year. If the car is worth up to 7 million drachmas, it loses 20 percent of its value the first year, and so on. So when a car is repossessed after one and a half years, it has already lost 30 percent of its real value. The ambitious buyer not only pays for this difference, but for the interest on the total amount. On the other hand the companies also lose money. According to Ioannis Dimos, who manages a Fiat outlet, companies have cut down on the five-year installment plan because they have lost so much money. «We are all paying for the sins of the stock market,» said Dimos. «In 2002, most people were buying cars they couldn’t afford,» said Mr K. Aivalis, general director of the Chrofin car sales and rental company. «Many wanted to buy a car without paying any deposit, although they did not have the means. They were mostly young people who came by after getting their first paycheck.» The stock market bubble, unemployment and the view that the Greek market cannot support more than 250,000 yearly sales of passenger vehicles, are presented as reasons for the current recession. Comparing the living standards of Greeks with those of the average European, the wages in Athens do not justify the fact that there is a car for every one and a half people.