HEARD on the street



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.


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.”


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.”

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