Used car sales are booming
Low rand sees online sites grow with cars, trucks and tractors listed as people seek relief
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.