USED VEHICLE sales are soaring, driven by demand for more affordable and economical vehicles, supply problems in new vehicle stock and a switch from public transport to owned vehicles in the Covid-19 environment.
Recent data from Transunion shows that for every new vehicle sold, 2.64 used vehicles are being sold, which represents a significant increase over the past eight to 12 months, InspectaCar JV head Jason White said yesterday.
He said InspectaCar saw a significant increase in activity with applications increasing by an average of 9.5 percent year-on-year. “After we moved out of tough lockdowns activity increased and InspectaCar advanced on a 16 percent increase in pre-owned vehicle sales in 2021,” he said.
Motus Holdings, the biggest vehicle distribution group in the country, said last week that it was experiencing strong demand for pre-owned vehicles across all geographies, on the back of the shortage of new vehicles. The hiatus in the car rental industry from the slump in tourism has meant that pre-owned vehicles from car rental companies are also in short supply – car rental companies have traditionally been a major supplier to the pre-owned market.
Motus said it had found alternative sources of pre-owned vehicles, and was also benefiting from technology, namely its motus.cars platform and the getWorth acquisition concluded in March this year. Global supply chain disruptions, manufacturers that were closed during lockdown coming back on stream, a shortage of computer chips for some new vehicles, have impacted the delivery of new vehicles, panels and parts, and Motus has had to pay substantial increases in freight and logistics costs for these.
WeBuyCars, one the biggest preowned vehicle traders in the country, said innovations that have taken the risk out of the vehicle customer buying and selling process, were also stimulating the market.
Transaction Capital chief executive David Hurwitz – the group owns WeBuyCars – said last week the selling and buying of pre-owned vehicles used to be difficult and sometimes risky for vehicle owners, but WeBuyCars’ technology has solved the problems.
“Our process to sell a vehicle is seamless, transparent and safe and we pay the cash into your account before we get the car,” he said in a telephone interview last week, adding that the company was also benefiting from artificial intelligence which was used to source prospective pre-owned vehicles in the market. “Not only have digital innovations greatly improved the experience for consumers from a buy and sell perspective, but they have improved the transparency and condition of a pre-owned vehicle,” said White.
He said InspectaCar would soon be able to offer consumers a more transparent digital experience that revealed the true condition of a pre-owned vehicle, making the consumer’s decision less demanding, through live video streaming and an interactive vehicle inspection report.
Meanwhile, FNB’s latest edition of its nav» Smart Tools on the FNB App, was launched this month, and among its features was to allow customers to access vehicle finance from WesBank, as well as deals and discounts from car brands via nav» Car.
WesBank Motor chief executive Ghana Msibi said the nav» Car smart solution had integrated into WesBank, and they were already providing real help to half-a-million car users who had seamlessly loaded their cars on to the FNB App. FNB banked customers could also access a list of offers, brands and vehicles, as well as streamlined preapproved finance from WesBank via the app.
The National Automobile Dealers Association aid the pre-owned market was likely to continue to be constrained in supply due to multiple factors.
The shortage of new cars in certain segments meant many consumers were also not willing to trade in their existing cars until their preferred new car became available.
Many motorists were also not driving as much as they were prior to the pandemic, and holding on to their cars longer. This added to the shortages of pre-owned vehicles, the association said.
“We have seen a few soft spots in the pre-owned market, predominantly at the lower end. The middle and upper end of the market, however, is still thriving, as pricing to their new vehicle counterparts offer excellent value. A lack of de-fleeting by rental companies, however, will create more pressure on supply of used cars on the lower end.”
BUSINESS REPORT ONLINE