Johannesburg - New car price inflation is slowing in South Africa, according to TransUnion’s Vehicle Price Index (VPI) for the third quarter of 2017, although used car prices are increasing at a higher rate.
The latest index, based on data from SA's 15 top carmakers, shows that vehicle price inflation stood at 3.1 percent in the third quarter, compared to 9.9 percent in Q3 2016.
This does not mean that car prices are actually falling, however, simply that the rate at which they’re increasing has slowed somewhat.
Over the same period, however, used car inflation increased from 2.8 percent to 3.6 percent, which is the highest level since 2012.
“Used cars have been performing well for the last few years, and as a result, less people have been opting for new vehicles,” said TransUnion’s Auto Information head Derick de Vries. “Less new vehicle purchases mean less vehicles to resell to dealers, a dwindling availability of quality used cars, and that dealers can thus charge more for them,” he explained.
The vehicle information specialist added that the latest VPI report suggests that an about-turn may be on the horizon, with slower new car inflation and bigger than usual used car price hikes boosting new vehicle sales.
This has already started to happen, with Naamsa last month reporting a 7.0 percent year-on-year increase in passenger vehicle sales.
“Despite enduring tough times of late, the overall outlook for both the new and used vehicle markets looks tentatively positive,” TransUnion said.
It also added that the value of financing had remained the same since the last quarter’s report, with 41 percent of new and used cars having been financed below the R200 000 mark and the average used car loan amounting to R234 000.