Used car sales are boom­ing

Low rand sees on­line sites grow with cars, trucks and trac­tors listed as peo­ple seek re­lief

The Witness - Wheels - - MOTORING -

IT is deeply un­fair that our rand is so weak. For as ev­ery­one who has bought fast food over­seas can tes­tify, back home our rand buys you a whole lot more of the same burger and milk­shake than it does in Lon­don.

But be­cause of taxes and cur­rency shenani­gans our rand does not buy a whole lot of new car.

Which is why sales of used cars are ris­ing ev­ery month.

Naamsa’s re­port for May shows new car sales con­tin­ued their de­cline, with to­tal in­dus­try sales of only 42 907 new ve­hi­cles sold — a 10,3% fall.

“Used car sales are boom­ing, and set to con­tinue grow­ing over com­ing months as more con­sumers adopt the sec­ond-hand trend,” Naamsa in a state­ment.

As a re­sult, Karla Le­vick from on­line clas­si­fieds OLX said on­line sites for used cars are see­ing ex­cep­tional de­mand.

Th­ese sites all have the in­her­ent risks that come with trans­act­ing large amounts with strangers, but Le­vick said the higher prices peo­ple can get for their cars and the sav­ings in deal­er­ship com­mis­sions are enough at­trac­tion.

She said it is not only light ve­hi­cles and cars that are trad­ing heav­ily on on­line clas­si­fieds. “We are see­ing a lot more trucks and other com­mer­cial ve­hi­cles be­ing listed, which means busi­nesses too are mov­ing away from buy­ing new and rather look­ing for sec­ond-hand bar­gains.’’

Ac­cord­ing to re­cent data re­leased by OLX, the most pop­u­lar car brand lead­ing the pack on on­line clas­si­fieds is Volk­swa­gen, with Toy­ota close be­hind in sec­ond place. In terms of mod­els, the VW Golf tops the list fol­lowed by the Polo, Corolla and then the BMW 3 Se­ries.

Sim­phiwe Nghona, CEO of WesBank Mo­tor Re­tail, said the bank’s own data also re­flects a con­tin­ued shift to the used mar­ket. “The weaker rand has re­sulted in con­tin­ued new car price in­fla­tion and this has caused con­sumers to shift to the used car mar­ket. Con­se­quently, de­mand for used cars — as mea­sured by ap­pli­ca­tion vol­umes – grew 9,5% in May.”

Nghona said th­ese sup­ply-de­mand dy­nam­ics have sub­se­quently seen used car prices in­crease and in May the aver­age trans­ac­tion value for a used car fi­nanced through WesBank grew by seven per­cent.

“In the cur­rent mar­ket con­sumers will find them­selves ei­ther hav­ing to hold onto their cars for longer, be­fore re­plac­ing them with a new model, or tak­ing their bud­get to the used mar­ket,” said Nghona.

“This fo­cus on af­ford­abil­ity high­lights the pres­sure on con­sumer bud­gets. The cost of mo­tor­ing is on the rise, and will start play­ing a big­ger role go­ing forward,” Ngo­hana warned.

— Wheels Re­porter.

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