Both 2020 and 2021 have been rough years for the South African economy on a number of fronts. Between the economic and social ravages of the global pandemic and our own political, economic and social woes, a shrinking local economy has meant a drastic transformation in the way we spend our money, and unfortunately for many, the way we make it.
Like many of our local industries, the automotive sectors of South Africa have not been immune to this economic volatility. A dramatic dip in last year’s car sales was an alarming year-long trend that started in March and went through to the rest of the year. Automotive sales began to climb again this year, but it has been more of a slow and painful recovery that still has a long and steep hill to climb.
Of course, these measurements drawn from the latest release from Stats SA, are yet to account for the impact that the recent riots over Jacob Zuma’s arrest have had on the economy. Their most recent statistics show a meagre 0.6% since July 2020 coupled with a handful of other small growth statistics this year.
They are, however, dwarfed by the shrinkages seen last year where April alone saw an 83.2% reduction in new car sales and a further 50% in May. These were not nearly the only shrinkages; they were just the most substantial.
By and large, a lot of people have already started opting to buy second hand cars in South Africa over new ones, and our collective shrinking spending power is one major factor of this, but it is not the only one. The used car market in SA is bustling right now for a few reasons:
For a lot of people, the abovementioned shrinking economy has meant making major cutbacks, so a lot of those who have had their eye on a new car have had to shy away from the idea for the time being at least.
This is only compounded by the ever-rising price of new cars, whether luxury or not, with some of them priced high enough to match the price of a new home. When the spice was flowing and the economy was moving, the mounting costs of owning, ensuring, maintaining and repairing a car was easy to ignore, but when cutbacks need to be made, more zeroes often mean more reasons not to buy new.
But people still need to buy cars, which is why the second hand car option has only become more and more viable as we’ve all started to wrap chains around our wallets.
But cutbacks haven’t just changed the way people have had to buy cars. It has changed the way they sell them as well.
Even in our pre-pandemic economy, the cost of owning a second, third or forth car has been an ongoing expense that a lot of owners would have preferred to shy away from, but people were still in a better position back then to do it.
Things are a little different now, having to cut back means that a lot of people have had to shrink their beloved collections. Households have had to scale down to essentials, which means that a lot of them opted to sell non-essential cars last year.
What does this mean for you?
It means that the used car market is better off in terms of choice, for one. There are currently plenty of near pristine models on second hand car showrooms that come with price-tags that are pretty much unproportionally low for what you are getting.
This means that your options are broader.
It also means that right now, and who knows for how much longer, the used car market is absolutely a buyer’s market.
While used car prices are largely dependent on the vehicle’s book value, depreciation, condition, age, mileage and such, there is a factor that effects it as much as nearly any other thing that can be bought and sold, the principles of supply and demand.
Major economic cutbacks that have seen many South Africans sell their existing cars to dealerships means that there are far more used cars on the market than usual, which impacts the scales of supply and demand in favour of the buyer.
This means that you are far more likely to find the car you want, not just at the right price, but at an even better one.
It also means that you will be spoilt for choice in terms of which dealerships have a better deal.
All of the above factors lead to one very important point for those looking to buy a car and have been impacted by the economic woes of the last two years. You don’t have to suffer a downgrade in your expectations when you buy a second hand car in South Africa right now.
If you’ve grown used to the glorious leather seats and purring engine of your BMW, you can stick to what you’re used to while still downscaling what you spend on your vehicle.
If you were looking at buying a new but inexpensive car, you could opt for a graceful upgrade without having to spend more than you had already prepared for; especially now.
Here at Second Hand Cars we make it easy for you to find exactly what you’re looking for with a simple online store that lets you browse and compare a full selection of used cars across South Africa from a range of leading and trusted dealers.
If you would like to see more of our second-hand cars on offer, be sure to visit the SecondHandCars website today.
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