THERE is an increase in demand for used as well as new cars.
The TransUnion Vehicle Pricing Index for the first three months of 2018 discovered a shift from used to new cars. They also noticed that the demand for used cars is significantly reducing the supply.
The rise in new car demand is because manufacturers and importers are forcing prices to stay as low as possible to sell more new vehicles in a tough market.
Incentives to buy new cars include preferential financial terms, trade-in assistance, no-cost accessories and discounts.
Finance deals for used passenger cars decreased from around 10% when compared with the same three-month period in 2017 and 2018. Over the same period, finance deals for new cars jumped 6%.
During the compared times, new car price inflation decreased from 8,8% to 2,4%. Used vehicle inflation dropped from 3,7% to 2,9%.
The 2018 period saw that 46% of used vehicles financed were two years or younger, while 7% were dealer demonstration models.
This means many buyers of used cars are now choosing nearly new used cars instead of new models with depreciating losses.
This pattern is reflected in an increase in the average used car loan of R242 000.
“All these factors keep the used vehicle market busy, which is why the Gumtree Auto Pre-Owned Vehicle Awards were launched last year and this year’s are being organised,” said Jeff Osborne, the head of Gumtree Auto, which is a very important component of Gumtree, the country’s biggest website catering to the classified market.
It shows that Mzansi people look for a lot of value when shopping for new or used cars.