Less stock, higher prices. Used car market in demand
“The laws of supply and demand drive up the price, inevitably, over time.”
So says Anthony Kapel “Van” Jones, the American news and political commentator, author and lawyer. And this is precisely what we’re seeing happening in the used car market in South Africa right now; the price of the country’s top ten most enquired on car models has risen by an average of around R30 000.
This emerged from an analysis of the most enquired on models on AutoTrader in the first six months of 2021 versus the last six months of 2020.
According to AutoTrader’s CEO George Mienie, this is a tangible result of supply and demand. “According to the 2021 AutoTrader Mid-Year Industry Report, over 319 million total vehicle searches were conducted on AutoTrader during the first half of 2021.
This was a record high, representing growth of 44% year-on-year. This increase in demand has – quite understandably – resulted in prices increasing,” he explains.
Thankfully for car buyers, prices have not increased by the same percentage as car searches. Take the Toyota Hilux, for instance – which was the most searched for model in the first six months of 2021 (it accounted for 3.6% of all searches and 11,5 million searches).
Its average price has risen by a mere 11.54%.
The increase in average price for the Ford Ranger – the most sold used car in the 2020 AutoTrader Annual Report and the 2021 AutoTrader Mid-Year Industry Report – was even lower at R26,022, or a mere 7.47%.
While used car demand has pushed up prices, this has also been as a result of more restricted used vehicle availability.
The 2021 AutoTrader Mid-Year Industry Report reveals that, in the six months ending June 2021, over 633,000 vehicles were listed on AutoTrader, with June accounting for the largest stock count. Year-on-year there was a 4% reduction in available stock – meaning fewer consumers were selling vehicles.
Given this development, Mienie says it may be advisable not to delay a used car purchase.
“If these trends continue – namely we see an increase in demand and a reduction in stock – used vehicle prices may continue to increase in the second half of 2021 too,” he concludes.
