According to the report, the percentage of cars\u2014both new and used\u2014being financed below R200,000 declined to 18% in Q4 2023 from 19% in Q4 2022, likely due to the increased average purchase price of new vehicles, leaving prospective buyers little choice in this price band.<\/p>\n\n\n\n
The data further found that\u00a027% of vehicle financing deals were for cars between R200,000 and R300,000, and\u00a055% shopped for cars over R300,000<\/strong>.\u00a0<\/p>\n\n\n\n TransUnion noted that this is a result of rising vehicle prices, with consumers forced to spend more for a reliable vehicle, while those in the used vehicle market moved to older cars to meet their needs.<\/p>\n\n\n\n “The average financed amount for vehicles rose to R396,000 in Q4 2023 from R386,000 the previous year, reflecting a growing market trend,” it said. <\/p>\n\n\n\n The country\u2019s pre-owned sector has taken off amid\u00a0higher fuel prices and a challenging economic environment.<\/p>\n\n\n\n However, the data also indicated that the Used-to-New Ratio declined to 1.2, indicating the finance houses are financing 1.2 used vehicles for every 1 new vehicle (dropping notably from 1.9 in Q4 2022).<\/p>\n\n\n\n Transunion noted that this marks a significant shift in consumer behaviour, potentially driven by increased confidence, vehicle availability, and the financial practicality of opting for new over used vehicles<\/strong>, as buyers no longer find enough value in the pre-owned market, given the price pressures. <\/p>\n\n\n\n “The South African vehicle market is navigating challenges predominantly rooted in a tough economic environment characterised by escalating inflation, higher fuel costs and currency fluctuations. <\/p>\n\n\n\n “These factors contributed to a noticeable decline in vehicle sales, marked by more than a 4% decrease in financed vehicles and a 6.3% reduction in new passenger vehicle sales,” it said. <\/p>\n\n\n\n Transunion added that economic constraints led many consumers to increasingly opt for more cost-effective mobility options, including even older, less expensive, used vehicles and alternative financing models. <\/p>\n\n\n\n This trend is evident in the changing demographics of vehicle financing \u2014 marked by a decrease.<\/p>\n\n\n\n “Nonetheless, the market is witnessing a glimmer of hope as manufacturers introduce discounts and incentives, potentially facilitating market recovery and growth despite prevailing economic adversities,” it said. <\/p>\n\n\n\n![\"\"](\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/05\/Screenshot-2024-05-03-101732.png\")
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