You are here: Covid-19 Demand for cars under R200 000 accelerates
Although drivers have seen five welcome decreases in the petrol price this year, the continued lockdown is taking its toll on stretched household budgets as many South Africans are forced to stay home or work reduced hours for reduced pay. In this environment, the choice to look at older, cheaper cars makes sense.
Older cars have already seen the steepest part of the depreciation curve and hold value better than brand new cars. Smaller, less expensive cars are usually also cheaper to maintain in the long-term.
This also ties in with lockdown data from online car sales group, Autotrader, showing a 20% increase in consumers cruising their pages from 11pm and 3am, with emphasis on cars priced under R200 000. “The increased activity is most likely coming from financially pressed consumers who are looking to downgrade their cars so that they can free up cash,” says Susan Steward of Budget Insurance.
“In the current circumstances, it’s a no-brainer that drivers are looking at more economical vehicles. Cars under R200 000 mean a smaller finance instalment each month and can also translate to a lower insurance premium than a more expensive car,” says Steward.
More car dealerships should start trading during level three of the COVID-19 lockdown, opening up further opportunities for car sales.
“Reassessing your choice of car and downgrading can be a good budget decision in a tight economy. However, make sure you do your homework before you make any purchases or trade-in your current vehicle,” Steward cautions.
Your checklist when buying a second-hand car
Before you sign on the dotted line, the AA has the following handy tips when buying a second-hand car:
Steward concludes: “Another bonus in buying a more economical car is that if it’s worth less than R100 000 and isn’t financed, you can more affordable non-comprehensive cover with Budget Lite. Budget Lite cover options include third party, theft, hail cover, accident assist (includes towing from the scene of an accident and storage of your car) and limited accident cover up to R15 000.”