How South Africans are getting around expensive new car prices
Credit bureau TransUnion has released its Vehicle Pricing Index (VPI) for Q2 2017, detailing South Africa’s new and used vehicles statistics.
The index gauges the relationship between the increase in vehicle pricing for new and used vehicles from a basket of passenger vehicles which incorporates 15 top volume manufacturers. Vehicle sales data is then collated from across the industry was used to create the index.
According to the report, consumers have endured a number of new price increases at a rate above CPI for the last six quarters, although the gap has diminished due to the ongoing demand shift to used vehicles.
As a result, the supply of quality used vehicles is diminishing as the demand increases, supported by increasing prices of used vehicles. Manufacturers have also slowed down the price increases in an attempt to help dealers sell more new vehicles.
South Africans are buying two-year old cars
The report noted that a large number of South Africans are getting around high vehicle prices by opting to purchase used vehicles that are less than two years old.
The data showed that the percentage of cars (new and used) being financed below R200,000 has moved from an average of 50% for the last five quarters to 40% in Q2, which correlated to the increase in new passenger vehicle prices and 44% of used vehicles financed being under two years old.
This is also shown by the increase in used car loans which has been consistent at around R225,000.
According to TransUnion, this indicates a shifting emphasis on the value proposition that consumers place on their vehicles, as they look for the maximum amount of value from a car.
It indicated that finance houses are now financing 2.41 used vehicles for every one new vehicle. This follows the trend of the VPI where consumers have had higher price increases on new vehicles versus used vehicles.
The cars they’re buying
The report noted that Toyota and Volkswagen have been doing well in both areas sharing the top two spots in both new and used, and capturing more than 40% of the new passenger financed volumes. Renault has had a good quarter in the new passenger market and BMW in the used, TansUnion said.
What they’re buying (bakkies)
Toyota has performed well in both areas and seems to be the market leader in light commercial vehicles said Transunion. It also noted that Ford and Nissan has closed-in on the used market.
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