Vehicle supply has recovered, but prices are dropping
Car dealers can still get a decent deal, just not what they would have had previously.
The new vehicle supply chain has improved, but consumers are still skittish about rising interest rates and the fuel price, so even preowned car prices are taking a knock.
The experts, getWorth, say this has caused the used car market to turn – prices are falling again.
getWorth’s sophisticated pricing tools are based on AI and live market data. The algorithms are able to separate the effects of mileage and time to expose the real underlying price trends. “We are able to compare apples with apples,” explained getWorth CFO Colin Morgan. “For example, the algorithm would be comparing the price of a 2018 BMW 320D Auto with 50 000km a year ago with the same car at 50 000km today – not one that has added an extra 15 000km.”
getWorth has produced a graph showing the like-for-like price trends for different price bands. One can clearly see how the normal falling prices reversed after the first Covid lockdown, and how the prices are turning again recently.
“Price levels remain high compared to two years ago,” said Morgan, “so car sellers can still get a decent deal – just not what they would have received at the peak. But it is good news for used car buyers. Buying a preowned car remains a sound financial decision as the vehicles are much more affordable than the equivalent new cars. High interest rates make that a big factor.”
getWorth’s information comes from its position as a leading online buyer and seller of preowned cars. The business developed AI-based pricing algorithms to enable more accurate live market pricing, designed to help consumers buy right and sell smart.
“We were the first in South Africa to apply live market pricing and we have been refining the AI models since 2016,” said Morgan. “The fact that we use it to trade every day in the live market makes it real, rather than a theoretical exercise. We have over 350 cars on our floor; we monitor pricing daily to make sure they are attractively priced.”
getWorth’s takeaway: with the market turning, sellers are no longer in the driver’s seat, but for car buyers there are good deals available.
Source: MotorPress
