The used-to-new vehicle ratio continued to climb at 2.67

Statistics registered a 36% increase in searches for vehicles in Q2 2021, as compared to Q2 2020. Normalising lockdown in Q2 2020, vehicle search growth would have been 26%, supporting the notion that consumers are opting for used cars over new ones as a result of continued economic pressure,” said George Minnie, CEO of AutoTrader.

Used vehicle retail has, however, recovered after the recent unrest. “Used vehicle buoyancy is good in the short term but bad in the long term, as new car retail is a critical feeder to the used car market.” Further to this, Minnie believes the knock-on effect from the lockdown and unrest to be a “recipe for even further future used car price inflation, as the vehicle fleet in South Africa ages and consumers buy up good clean used car stock rather than new.” TransUnion reports that used vehicle finance deals increased by 70% resulting in the TransUnion SA Vehicle Pricing Index (VPI) rising to 4.9% from 1.6% a year ago. The used-to-new vehicle ratio continued to climb at 2.67 used vehicles financed for every new vehicle financed and financing of demo vehicles dropped from 6% in Q1 2021 to 4% in Q2 as consumers opted for older vehicles. “Overall, the market has shown signs of recovery from last year, but new obstacles await. The next six months will be interesting for the automotive sector as the effects of consumer uncertainty and disrupted supply chains will inevitably delay purchases, which will cause dealers to rethink their approaches and seek alternative streams of income,” said Kriben Reddy, vice president of auto information solutions for TransUnion Africa. Sources: Nikki Chennells / TransUnion