Bankruptcies are increasing - so the used market is affected

As interest rates and inflation rise, pressure on Swedish companies is also increasing. So far this year, bankruptcies in Sweden have increased by 35 percent compared to the same period last year. This also means that the supply is increasing for those looking for used vehicles.

Sweden is currently experiencing a significant increase in bankruptcies, and the trend shows no signs of slowing down. With a consistent increase over the past 14 months, the number of bankruptcies is now at its highest level in over 20 years, according to recent figures from credit reporting agency Creditsafe. So far this year, bankruptcies have increased by 30 percent, compared to the same period last year.

– We are currently seeing record numbers in terms of the number of bankruptcies and this is extremely sad. Many jobs are being lost and dreams are being shattered. The development is due to the major challenges that many companies have and are facing right now due to the economic situation, while we have many more companies in Sweden today than a few years ago. If you look at all the November bankruptcies, for example, 4 out of 10 young companies were started during or after the pandemic, comments Henrik Jacobsson, CEO of Creditsafe.

This will affect the second-hand market.

A consequence of these financial challenges for companies is that many are faced with the need to sell assets, either to save money or to reduce the financial damage in the event of bankruptcy. The vehicle fleet is often one of the larger assets, which means:

• More used vehicles on the market

• Increased competition and thus reduced prices for used vehicles

• A wider and more varied selection of used vehicles

The supply is increasing

Companies that went bankrupt in 2022 owned a total of 6,801 company cars. This compares to companies that have gone bankrupt so far in 2023, which owned 8,200 company cars at the beginning of the year. The median age of these vehicles was 92 months. This suggests an increase of 342 vehicles (+5%) on the used market this year from bankruptcies alone.

When it comes to heavy vehicles, we also see a similar pattern. Companies that went bankrupt in 2022 owned a total of 790 heavy vehicles. In comparison, companies that have gone bankrupt so far in 2023 owned a total of 1473 heavy vehicles (+86%) with a median age of 159 months. This means an increase of 683 heavy vehicles on the used market this year due to bankruptcies.

The most common car models from companies that went bankrupt this year:

Top 10 most common company cars in Sweden (general):

Source: Creditsafe & Vroom