The used car market remains healthy, as evidenced by demand across WeBuyCars showrooms over the Black Friday week. From November 24th to 30th, WeBuyCars sold a car a minute for every minute that it was open for trade. On Black Friday alone, 864 cars were sold across the group in one day.
While the used vehicle market is blooming, the latest Naamsa statistics show that new vehicle sales dropped by 12.1% in November 2023 compared to the previous year. Consumers are becoming more money-wise and would rather buy a used vehicle than pay more for a new car, only for its value to depreciate by anything around 20% the moment it’s driven off the lot.
Rikus Blomerus, Chief Marketing Officer at WeBuyCars puts this into perspective: “With a R5 000 monthly vehicle instalment, you can buy a vehicle worth R247 488 today (assuming a 0% deposit, a 72-month term and a common rate of prime +2%). Two years ago, the same instalment would have gotten you a R277 348 car. This means you will need to either buy down by R30 000 to keep the instalment the same or prepare yourself for a higher monthly instalment.”
“Some consumers turn to expensive solutions such as big balloon payments, which often leads to problems down the line when wanting to trade in a car and finding that there is more owned on the car than what the car is worth.”
As a result, consumers are starting to increasingly benefit from the used car market instead. A quick search on WeBuyCars’ website shows that there are lots of options available. Using the R5000p/m as a benchmark, for R247 488, one could purchase a one-year-old Toyota Urban Cruiser 1.5 XL with 21 000km on the clock or a three-year-old Mitsubishi ASX 2.0 with 60 000km on the clock.
Some consumers preferred purchasing a brand-new vehicle because they want peace of mind that their car is covered by a service plan and warranty. However, companies like WeBuyCars offer pre-owned warranties and service plans which can be included with the vehicle finance, offering the same peace of mind even though the vehicle is a few years older.
WeBuyCars regularly publishes its vehicle price index (VPI), tracking the prices for a basket of popular vehicle makes and models over time. During the Covid pandemic, used car prices increased dramatically because of a shortage of new vehicle stock caused primarily by chip shortages and shipping delays.
According to the WeBuyCars VPI, in April 2022 when used car prices were at their highest, the average used car price was 28% more expensive than a year before in April 2021. Since that, peak prices have normalised and in November 2023 prices have actually come down 8% compared to April 2022.
“If you are looking for a combination of value for money, a wide range and peace of mind, a used car makes sense. The shift towards the used car market is evident in WeBuyCars’ performance and the Black Friday statistics are proof that our offerings resonate with consumers,” says Blomerus.
