Buyers willing to consider second-hand over new cars might uncover some major bargains, as the gap between new and used vehicles continues to widen.
TransUnion Auto Information Solutions, which releases a quarterly vehicle pricing index, said recently that while new car inflation at 4.14 percent is at its highest since December 2010, used car inflation is at its lowest since June 2006.
Average used car values in the third quarter of this year dropped by between 2.5 percent and 3.09 percent, meaning there are bargains to be had by buyers shopping at second-hand lots.
“The tide appears to be turning for the used car market,” says TransUnion Africa president Geoff Miller.
Given the rising cost of new cars, a trend that is unlikely to fade in the face of the volatility of the rand, TransUnion anticipates demand for used vehicles picking up in the months ahead, he says.
“Indeed, the number of used vehicles sold each month is already starting to increase.”
However, he adds that consumer credit remains under stress and it will be interesting to see what the future holds for the used car market.
TransUnion Auto Information Solutions calculates its price index from data it receives on monthly sales returns from thousands of dealers, as well as vehicle financing registrations from major banks. -Pretoria News Motoring