Demand for pre-owned cars outpaces new cars by more than two-to-one

The prolonged economic downturn experienced across multiple sectors in SouthAfrica has resulted in markedly depressed sales in the new car segment over thepast 12 months.This is evident in the monthly new car sales data released by naamsa | theAutomotive Business Council. As consumers seek more affordable mobilityalternatives, a noticeable trend has emerged in favour of pre-owned vehicles acrossall segments.WesBank’s Business Intelligence data for the first half of 2024 confirms this, withapplications for pre-owned cars outpacing new car applications by a ratio of overtwo-to-one.Shedding more light on the numbers, Lebo Gaoaketse, Head of Marketing andCommunication at WesBank, said: “In the first six months of this year, WesBankreceived 337 061 applications for vehicle finance linked to new cars. In the sameperiod, a staggering 688 316 applications were received for pre-owned cars.“The main reason for the sizable interest in used cars is affordability,” explainsGaoaketse. “The inevitable depreciation of a vehicle means pre-owned cars aregenerally cheaper than brand new alternatives, with the rare exception of modelsthat are considered classics or collector’s items. These can in fact appreciate in price due to their rarity that doesn’t match demand,” he says.“The downside, though, to buying a pre-owned car is that the bundled maintenanceor service plan, as well as manufacturer’s warranty, might have expired or be nearing expiration,” cautions Gaoaketse. “This means the owner will have to foot the bill for the ongoing maintenance of the vehicle.“The condition of the car also depends on how well it was maintained by the previous owner. This is why it’s important to buy from a reputable dealer whom you can trust to have conducted the necessary checks to ensure the vehicle is in good condition.“Furthermore, buyers in the used market don’t have the option to specify anyadditional features on the car they are buying. Finding that exact dream car thusrequires extended hours of searching through used car catalogues.”New car buyers don’t have this problem as they can configure their vehicle to matchtheir taste and budget.The peace of mind that comes with the new car is also unmatched thanks tocomprehensive warranties and service plans one can get with new cars. This affords the owner worry-free motoring for the first few years of the asset.“These new car perks, along with a cut in the repo rate and continued introduction of value-oriented models are some of the factors that are expected to drive the resurgence of the new car market, which remains a key part of South Africa’seconomy,” says Gaoaketse.