Bankruptcies are increasing - so the used market is affected

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

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

- We are currently seeing record highs in terms of the number of bankruptcies and this is extremely sad. There are many job opportunities that disappear and also dreams that are crushed. The development is due to the major challenges that many companies have and are facing right now due to the economic situation, at the same time that 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.

Then the used market is affected

A consequence of these financial challenges for businesses is that many are faced with the need to sell off 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 lower prices for used vehicles

• A wider and more varied selection of used vehicles

The range is increasing

Companies that went bankrupt in 2022 owned a total of 6801 company cars. This can be compared to companies that have gone bankrupt so far in 2023 that 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.

Even when it comes to heavy vehicles, we see similar patterns. Companies that went bankrupt in 2022 owned a total of 790 heavy vehicles. Compared to this, 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 (generally):

Source: Creditsafe & Vroom