Johannesburg - New vehicle prices are rising slower than general inflation, but consumers are still spending less money on cars, and they’re buying older second hand models.
These are just some of the insights revealed by TransUnion’s Vehicle Pricing Index for the second quarter of 2019.
According to the report, the Vehicle Pricing Index (VPI) for new vehicles increased from 2.6 percent in the first quarter of the year to 3.1 percent in Q2, while the VPI for used vehicles fell from 2.5 percent to one percent. Of course, this doesn’t mean that vehicle prices are coming down, just that the increases are taking place at a slower rate versus other consumer items.
The report also points out that the bulk of buying activity currently happens in the used market, with the used-to-new vehicle ratio (as measured by finance applications) increasing to 2.16 in Q2 2019 from 2.05 during the same period last year.
It’s interesting to note that only six percent of used vehicles that were financed were nearly-new demo models, while only 34 percent were less than two years old - a sure indication that consumers are increasingly opting for older vehicles.