The types of used cars that will sell for more in South Africa
There are many factors that come into play when selling or trading-in your car including demand for the type of vehicle, its age and whether is it financed, according to WeBuyCars.
WeBuyCars, which buys and sells thousands of second-hand vehicles across the country, provides tips on how it prices a vehicle using those three criteria.
The company recently opened its main showroom in Midrand, which it claims is the biggest car showroom in Africa.
CEO at WeBuyCars, Faan van der Walt, explained further:
Demand
Firstly, and probably the most important, is the demand for the type of vehicle you wish to sell. If the car is not in demand, the older it gets, the more it will depreciate. If it’s a newer car, and is in demand, you’ll be able to get more for the vehicle.
The features of some vehicles might also have a small effect. For example, a specific vehicle, like a Tazz, which is a very old vehicle but is high in demand, you could buy for R40,000, but a Citroen C2, which costs the same new, would cost R25,000 to buy as there is not much of a demand for the vehicle.
“If the car is in demand we pay a lot more for it,” said van der Walt.
“What we also take into account is what we already have in stock. If we already have five or six of a certain vehicle, our offer will be less on any new ones that come through our website, as the ones that we have aren’t selling as well.
“We look at what we have available, what is available on the market, what type of specials there are at the moment, and we also look at the extra features that a vehicle might have. Extra features (like a sunroof) are expensive, if the vehicle is the standard one then we might be a little conservative on the offer, but if it includes features that most people look for when buying that type of vehicle, then our offer will be a little bit more.”
Van der Walt also said that WeBuyCars would consider paying more (or less) than the book value of a car based solely on demand.
“A car (e.g. a BMW) could be worth R200,000 but the company would only pay R160,000 for the vehicle if there is not a big demand, as they would likely only sell it for around R180,000. On the other hand, the book value of a car (e.g. Toyota Hilux) can be R50,000, but they would pay R90,000 for example, as the demand is high,” said van der Walt.
Another factor that plays a role in the asking price is the colour of the car.
For example, black cars are usually in lower demand because the colour shows scratch marks, but a white or silver one doesn’t show scratches as easily, which increases demand. It does depend on the make and model of the car, but with certain vehicles, colour plays a big role.
Age, depreciation and warrantees
“With newer vehicles, you would lose normally between 15–25% within the first year. On a newer, more expensive vehicle, you lose a lot more, and the older the vehicle gets, the more influence the demand for the vehicle has on the price,” said van der Walt.
“The age of the vehicle plays a big part in the amount you can sell your vehicle for, but for the buyer, the most important factors that should be taken into consideration when determining the value of a vehicle is supply and demand, current specials, mileage, vehicle condition and extras.”
The chief executive said that on more expensive vehicles, a warranty is relatively important too – but the bottom line is still whether the car is in high demand or not.
If it is still under warranty or a maintenance plan and it’s in high demand, you’ll definitely be able to sell the car for a higher price whereas a car in low demand without a warranty or maintenance plan will have a significantly lower value, he said.
“In addition, dealers would be more inclined to purchase a car with a warranty in case something goes wrong in the time that the vehicle is on their floor as it would make it possible for them to have it fixed with relatively little hassle or expense. Warrantees and plans also go a long way in offering piece of mind that the vehicle was well maintained and looked after.”
Financed vs paid-for
When a car is financed through the bank it usually takes about two to three years to break even on your vehicle and the amount still owed to the bank.
“However, when you break even, you won’t get anything out of the sale. It also depends solely on the type of vehicle, and once again, the demand for it,” van der Walt.
“How you bought the vehicle, should also be taken into account. If you bought the vehicle with a balloon payment, then the time period can be four to five years before you break even. You have to look at how the vehicle is financed and what type of vehicle it is.”
Useful tips and resources for determining car worth
There are so many mediums that you can use to get an idea of what your car is worth, such as Cars.co.za, Carfind or Autotrader. However mediums should only be used as an indication, as the price the vehicle is advertised for, might not be the price that you are offered, said van der Walt.
“We have received queries as to why we offer less than vehicles are advertised for on other mediums, but we take into account other similar vehicles that we had in the past and struggled to sell, even when advertised for less.
“It is important to keep in mind that the if a dealer buys your car they would also need to make a profit when reselling, and the more expensive the vehicle is, the more profit they would want to make as the risk of buying is bigger.
“It’s also important to take into account the price the vehicle is advertised for, is also not always the price it is sold for – there could be a discount, etc., and there is no way of knowing how long they have been trying to sell the vehicle,” he said.
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