Demand for used cars is currently outpacing that for new cars by more than two-to-one as economic realities continue to weigh down on consumers.
This is the trend seen in WesBank’s Business Intelligence Data for the first half of 2024, which showed that 688,316 customers had applied for used car loans, versus 337,061 new car applications.
“The main reason for the sizeable interest in used cars is affordability,” said WesBank’s communications head Lebo Gaoaketse.
“The downside, though, to buying a pre-owned car is that the bundled maintenance or service plan, as well as manufacturer’s warranty, might have expired or be nearing expiration,” Gaoaketse cautioned.
“This means the owner will have to foot the bill for the ongoing maintenance of the vehicle.”
The finance institution cautions customers to only buy from reputable dealers who have done the necessary checks to ensure that the vehicle in question is in good condition.
According to the 2024 AutoTrader Mid-Year Car Industry Report, used vehicle sales increased by 2.2% in the first six months of 2024, while new vehicle sales in South Africa declined by 6.9%.
The average listed price of a used car in South Africa was R445,181, the automotive retail website said, with the most popular used vehicles being the Ford Ranger, Toyota Hilux and Volkswagen’s Polo and Polo Vivo models.
Tide will turn for new cars
WesBank’s LeboGaoaketse said the new car market was likely to bounce back in the coming months as soon as the anticipated interest rate cuts came into effect.
According to Naamsa - The Automotive Business Council - South Africa’s new vehicle market declined by 4.9% year-on-year in August as buyers waited for the rate cutting cycle to begin. Interest rates are currently at a 15-year high, which is weighing down on consumer sentiment and affordability.
IOL Motoring