Cost of living crisis is bad news for car buyers in South Africa

 ·10 Oct 2022

The cost of living crisis is driving up the risk of poor road safety as consumers buy older cars and struggle with maintenance costs, says Kate Elliot, the CEO of Right to Repair.

Elliot said that cash-strapped consumers are taking their ageing cars in repeatedly for maintenance as seen globally, in countries like the UK.

Graham Stapleton, the CEO of Halfords, a large vehicle retailer abroad, said that in terms of what they see in their garages while taking into account continuing issues with the supply of new cars, the average age of cars will pass the nine-year mark very soon and could creep above 10 – before the cost of living crisis ends.

The cost of living continues to rise following an increase in interest rates by the South African Reserve Bank Monetary Policy Committee (MPC) in September, by an additional 75 basis points – the fifth consecutive increment since November 2021, said Elliot.

She said that the carpool in the country is also ageing, with a general slowdown in new vehicle sales, compounded by the fact that in South Africa there is no enforcement of periodic testing.

In the UK testing needs to be carried out annually, while locally, there is no requirement for a roadworthy inspection for nearly 80% of the vehicle population, noted Ferose Oaten, National chairperson of the Vehicle Testing Association (VTA).

An amendment in 2014 to Regulation 138 of the National Road Traffic Act was meant to prescribe that vehicles older than 10 years be tested every two years, however, to date this has not been enforced and vehicles are still only required to have a statutory roadworthy test on change of ownership.

Some good news

Elliott said while this may seem like a double-edged sword – enforcing safety checks on motorists when consumers are already so financially stretched – the good news for motorists is that:

“Since the coming into effect of the Guidelines for Competition in the SA Automotive Aftermarket, we have seen a general opening up of the market providing motorists with the freedom to shop around to find the most competitive service provider.”

“This makes our aftermarket a fairer place to do business and while we don’t necessarily foresee service prices coming down that much, we are seeing better quality service being provided and a general slowing down in inflation of service prices.”

Parts on the other hand have actually seen a decrease in price due to the extra competition now in place. This all bodes well to counter the effects of inflation and help keep our roads safe, said Elliott.

The final guidelines for competition in the South African automotive aftermarket came into effect on 1 July. They state that owners of new cars have the right to repair or service their vehicles at an independent provider of their choice.

Under the new guidelines, owners aren’t locked into the restrictive embedded motor or service plans, and vehicle manufacturers won’t be allowed to void warranties if owners choose to go with an independent service or repair provider.

Some of the key changes included:

  • Dealerships and manufacturers can’t lock you in – You are free to seek servicing, upkeep, or mechanical repairs for a new car at any independent service provider of your choice, while automobile manufacturers cannot prevent you from doing so.
  • Unbundling of plans at point of sale – At the point of sale, maintenance and service agreements will be separated from the vehicle’s purchase price. This will provide customers the freedom to choose whether to get the maintenance or service plan from their dealership or from a third-party supplier.
  • You can fit non-original parts –  Under the new guidelines, consumers can fit original or non-original spare parts, whether by an approved dealer, motor-body repairer, or an ISP, during the in-warranty period. The quality of these parts will be dealt with in line with consumer protection laws, as well as existing warranties.

Read: Top CEO warns of knock-on effect from major strike action in South Africa 

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