Cars cheapest in the Cape - honest!

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IOL mot pic Aug26 Used Cars 3 . It may be worth your while to look for a better deal where the market is more competitive or the model you are looking for is more plentiful.

Cape Town - A study by data provider Lightstone has shown that the price of vehicles varies from province to province - and that buying your new or used car in one of South Africa's 'economic powerhouse' provinces can be a wise move, financially speaking.

Head analyst Paul-Roux De Kock says it should be no surprise that stock availability, market competition and population density (which allow access to a wider customer base in the busier provinces) affect the price we pay for our cars.

"There are more dealers, with more cars in stock in the bigger provinces," he explained, "which can drive down prices as dealers offer better deals to compete for sales."

BETTER DEALS IN THE MOTHER CITY

Gauteng has caught up to KwaZulu-Natal and is now jointly the second cheapest province to buy cars in, with prices 0.4 percent lower than the national average - but the Western Cape remains the cheapest at 0.6 percent below the national average.

The City of Johannesburg, which used to be the 10th cheapest, has become the seventh cheapest municipality in which to buy second hand cars - Jozi prices are 2.1 percent below the national average.

"By contrast, dealers will be likely to sharpen their pencils in smaller municipalities where the competition is less intense - such as in the Eastern Cape's Blue Crane municipality where vehicles are being sold at 5.1 percent above the national average."

Click here for the provincial listings

New cars and bakkies are generally sold at the manufacturers recommended price, no matter where you buy, but used-car prices are not only determined by mileage and condition but also by market factors such as how many of that particular model are available in your area, and how much demand there is.

"For example," said De Kock, "if a lot of people in Mpumalanga want to buy SUVs to deal with worsening road conditions, but only a small number of people are willing to sell their SUVs, that will create a market where dealers or sellers can ask higher prices for them."

Second-hand car prices in coastal provinces can also be pushed down by the perceived effect of rust on the body - even though newer models increasingly use more advanced materials that are less affected by corrosion.

THAT ALSO AFFECTS INSURERS

"Innovative insurance companies are already starting to include location and geo-demographic factors when calculating ratings; we could see insurers creating customised policies with varying payouts on claims, depending on where you live."

But that can also work both ways: the internet is a great tool for expanding your search outside of your own area.

De Kock pointed out: "With prices in the City of Johannesburg averaging two percent lower than in Tshwane, it could be incentive enough for somebody in Pretoria to drive there.

"Two percent on a 200 000 car is R4000 - enough to pay for your fuel and tolls to drive from Pretoria to Johannesburg and still save you money."

DO YOUR RESEARCH

Websites such as Lightstone’s free Zoopa service allow you to research factors such as availability and depreciation - especially as most vehicles depreciate fastest in the first three years.

"You could find your vehicle is depreciating faster than you're paying off the finance," warned De Kock, "which could leave you owing more than it's worth if it gets written off or stolen."

"If you possibly can, try to pay extra cash into the loan in those critical first three years."


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