Quiet Capitalism : Car Bazaar: Quick Deals for Soviets

As two men approached the bright green, almost new Zhiguli sedan, the youthful driver rolled down his window and whispered, “Twelve.”

He was asking 12,000 rubles (about $13,440) for a car that would cost only 9,000 rubles (about $10,080) if it could be bought from a dealer. His caution was understandable. Profiteering on the resale of autos is a crime in the Soviet Union, one that carries heavy financial penalties, including confiscation of the car.

But the young man was in good company, at Moscow’s biggest used car lot, an oasis of private wheeling and dealing in a society where most prices are fixed by the state.

Long Waiting Lists

Waiting lists for new cars are often so long that people turn to the so-called Car Bazaar to make an instant deal on a used car. They may drive away in a konfekta --a “sweetie”--or, if they’re unlucky, in a razvalina --a “ruin.”

The government fixes an official price for the transaction and takes a 7% commission, but the real price is invariably settled privately between buyer and seller, out of earshot of the official appraisers.

“It is beyond the powers even of the Department for Combatting the Embezzlement of Socialist Property and Speculation to block this operation,” according to a recent article in Izvestia, the official government newspaper.

Saturdays Are Busiest

Even when the temperature is far below zero, potential buyers turn out to look over the hundreds of cars at this used car lot in southeastern Moscow. Saturdays are busiest. Owners will raise the hoods of their cars and start the engines; buyers will poke around for rust and check for signs of repainting. Occasionally, someone will kick a tire.

Besides the open market in used cars here, owners may sell their cars through an auto shop, on consignment, at a price they fix. A car may also be sold on a state-run lot, but if it does not find a buyer there, its price will be marked down until it is sold. Some people suspect that on the state lot the best cars are sometimes held back, virtually out of sight, for friends of the salesmen.

The unofficial used car market is far more bustling than the government-operated lot nearby, where shopping requires a permit and only 100 persons are admitted at a time to view the vehicles on display. In addition, the government lot is closed on weekends, when most people have time off from work.

Cars Appreciate in Value

Many of the shoppers at the private marketplace appear to be buying their first car, an investment usually possible only after several years of scrimping and saving. Therefore, the choice is made cautiously, and buyers often come back week after week until they find a car and a price that suits them.

A black Volga sedan, the car used by most Soviet officials, commands a premium of 2,000 rubles (about $2,240) because it is believed that Moscow’s hard-nosed traffic police will not risk offending some VIP by inquiring about his activities. On a recent Saturday, the owner of a three-year-old black Volga with 18,000 miles on it was asking 20,000 rubles (about $22,400) for his car, which sells, new, for less than 16,000 rubles (about $17,920).

Plagued by Breakdowns

Demand is brisk, even for the Moskvich, a compact that is plagued by mechanical breakdowns and has a reputation as a lemon. A battered 1973 Moskvich station wagon with a badly dented front fender was pulled into the lot, and the driver said he wanted 5,000 rubles for it (about $5,600).

“They put real iron in this car back then,” he said.

Another Moskvich, a 1980 model with 22,000 miles on it, drew a good bit of interest even though everyone was put off by the price, 5,000 rubles. The owner admitted, though, that he expected to get no more than 4,500 rubles (about $5,040) after the usual haggling.

“My trump card,” he said, “is that my car uses 76 octane gas”--a reference to the cheapest and most widely available grade of gasoline in the Soviet Union.

Zhiguli Retains Favor

The favorite model clearly is the four-door Zhiguli, an early version of the Fiat 124 that has a better reputation than the Moskvich and is much less expensive than the larger Volga. One advantage of the Zhig--as it is called--is that it can be counted on to start in Moscow’s sub-zero winter temperatures. Its great drawback is that the camshaft, an engine part in extremely short supply, usually needs to be replaced every 15,000 miles or so.

At the lot, heads turned when an American car, a 10-year-old Chevrolet, rolled up. Its owner asked an incredible 25,000 rubles (about $28,000) for it, though it was rusty in places and had cheap plastic in place of a window on the driver’s side.

Permission to import foreign cars is granted only to an extremely-privileged few--such as world chess champions. Obtaining spare parts would be almost impossible, so the 10-year-old Chevrolet would be impractical for an ordinary Soviet driver. Because owning a foreign car is virtually out of the question, there is no interest in the merits of Japanese subcompacts or the latest gadgets available on American cars.

There are now more than 10 million cars in private hands in the Soviet Union, about one for every 27 persons. In the United States, the ratio is about one car for every two persons.

No Installment Buying

Cars are relatively more expensive here. The typical worker’s monthly pay is about 220 rubles ($246), and buying a car requires cash in hand. There are no installment loans. A worker and his wife may be investing their combined salaries for two or three years when they buy a used car.

Used car buyers in the Soviet Union seem to be extremely suspicious. They worry about the undercover police, known as “the Dark Force,” which tries to prevent speculation.

And the buyers are mostly men. Only a few women are to be seen at the lot.

“Women might go for a rug on the floor while the engine is falling apart,” one seller said. “Women are brought along only because they provide half the cash.”

Buyers quibble about dents in the body, wear on the tires, rust or chips in the paint. Once they agree on a price--and on who will pay the 7% to the government--they must present the car for appraisal and the setting of the official price.

Bribes Often Used

It is important, so as to reduce the amount of the commission, to get the price as low as possible. The appraisers understand this and sometimes, according to Soviet car buyers, it takes a bribe to get them to cooperate.

A man who has bought four used cars in his time said, “One way is to slip a 25-ruble or 50-ruble note into a match box and then ask the inspector, with a big wink, ‘Do you smoke?’ and hand him the box.”

After completing the paper work at a nearby traffic police station, the buyer and seller usually meet in a secluded place where the additional cash can be handed over and the transaction can be completed.