At the same time, new car prices have been falling, and may continue to do so.

Lender Swedbank says that car leasing applications, a popular route for purchasing a new vehicle, have fallen significantly in volume.

Swedbank leasing manager Karin Saar told AK that: "The volume of applications has really fallen quite a bit; let's say somewhere around the 25-30 percent-mark, but for as long as there is demand, vehicles are actually still being purchased and leased, and the market is not dead."

One dealership, Viking Motors, told AK that customers have been postponing purchase decisions while the microchip shortage crisis is resolved, and until after the holiday season is over, not to mention the continued inflation.

Raimo Koppel, Viking's CEO, said: "The market for new cars is seeing a downturn, and this is definitely caused by the festive mood, where people are currently focusing on Christmas parties, while there are also purchase decisions that have been postponed until spring.

"People will see what heating and gas prices do to the consumer, and then in the spring, they will have to decide whether to exchange their existing vehicle or not," he went on.

This has also affected used car sales, Silver Havamaa, head of used vehicle portal Mobile.ee, told AK.

He said: "Unfortunately, a car is the second biggest outgoing after housing, so these decisions are made at its expense. First and foremost, you need to make a living."

Whereas a year ago a used car could actually cost more than a new one, this is no longer the case.

"This bubble has burst, for the most part. It was not a normal market situation whereby a used car cost more, or where a person could buy a new car, drive it for two or three years and then get the same amount, or more, when selling it," he added.

New car prices are also falling. While vehicles in stock which were ordered during the chip shortage already have seen extensive price discounts, this is expected to continue in the spring, AK reported.

Raimo Koppel said: "I think that these cheap prices are already here today, and they will probably come in January, just as with the big campaigns every year."

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