HEARD on the street
CAR PRICING: BUYERS HAVE THE UPPER HAND
TransUnion’s Vehicle Pricing Index (VPI) reveals good news for car buyers. Its report for the second quarter of this year shows that the VPI for new passenger vehicles has shrunk from 8.4% in the second quarter of last year to 5.4%, while the VPI for used vehicles increased from 2.7% to 3.6% over the same period.
This means that, if you are trading your car in, you could get a good deal as used models are now more in demand. Meanwhile, manufacturers are finding it harder to sell new cars as buyers consider their options in the used sector.
Derick De Vries, CEO of auto information solutions at TransUnion Africa, says: “There is a demand for used vehicles and not enough supply. On the used car side, the customers are seeing more value. They can buy a cheaper vehicle with more extras.”
If you are in the market for a new car, you could also land a bargain or two.
“Manufacturer websites are providing trade-in assistance of between R30 000 and R100 000 as manufacturers may still be sitting on old stock. It’s an opportune time for consumers who are in the buying cycle,” says De Vries.
NCR WARNS ABOUT CAR PAWN SCHEME
If you are desperate for money, you have to be careful what you are willing to do for it. If you pawn an expensive asset like your car, you have to factor in how you will get to and from work every day should you not be able to repay the loan.
Also, the company you are dealing with may not be transacting legally.
The National Credit Regulator (NCR) this month referred Sun Finance SA to the National Consumer Tribunal after an investigation by the NCR that revealed that the terms of the “pawn to drive” agreement entered into by Sun Finance were in contravention of the National Credit Act (NCA).
In May, the tribunal declared the Allied Capital “pawn your car and still drive it” scheme unlawful and prohibited by the NCA.
Jacqueline Peters, manager of investigations and enforcement at the NCR, says: “The NCR cautions consumers against using their cars as security for loans or pawning them because they risk losing their cars if they fail to repay the loans as agreed with credit providers. The NCR will continue to investigate pawn brokers that are flouting the provisions of the NCA.”
RATE CUT MAY NOT STIMULATE PROPERTY MARKET
The recent rate cut by the SA Reserve Bank brings the repo rate down to 6.75% and the prime rate down to 10.25%. While this is good news for borrowers, experts are still uncertain about whether this will stimulate the property market.
Regional director and CEO of RE/MAX Southern Africa Adrian Goslett points out that uncertain policy and the recent credit downgrades have negatively affected consumer confidence, which has slowed sales in the housing market.
“During the second quarter of the year, the average price of freehold property declined from R1 161 481 to R1 139 604. The muted inflation of freehold homes can be largely attributed to the slower South African economy and rising unemployment rate. The unemployment rate in South Africa is at 27.7%, the highest it has been since 2008,” says Goslett.
“The struggling economy and significant unemployment rate poses a threat to household income growth and erodes affordability. In turn, demand for property is constrained, which negatively affects property prices.”