The prices of used cars in South Africa are returning to levels not seen since the start of the Covid-19 pandemic, spelling good news for potential buyers.
This is according to a report by getWorth, which tracked and analyzed the going rate for pre-owned vehicles over the last five years, from 2019 until the end of 2024.
The worst is over
Cars are a depreciating asset, but this long-established rule was disrupted when the world went into lockdown in 2020 following the Covid outbreak.
The lockdowns disrupted supply chains across several industries, which severely limited the production of new vehicles.
This, in turn, pushed many consumers towards the used-car market in search of transport, something that was further encouraged by low interest rates that made finance arrangements a far more attractive prospect, said Daniel King, getWorth’s Acquisitions Manager.
The result was a rare surge in demand for second-hand cars, which led to greatly inflated prices.
These conditions extended well into 2021 and 2022 as companies around the world struggled to ramp up production to pre-Covid levels to meet demand, making it a very expensive period for anyone trying to purchase a set of wheels.
By 2023, the market began to correct itself as new-car supplies recovered, but other hurdles such as rising interest rates, high fuel prices, and economic instability led to a drop in demand for vehicles.
“Dealers were left with high-priced stock, and consumers were hesitant to buy, particularly in the luxury segment,” said King.
“Affordable cars remained in demand, but the overall market faced significant pressure.”
The good news is that the worst appears to be behind us now, as the market is finally returning to pre-pandemic conditions with considerably lower prices in the pre-owned sector.
To illustrate this, getWorth produced a chart documenting the rise and fall of like-for-like used-car prices in South Africa from 2019 to 2024, which is shown below:
Used-car prices fell substantially in 2020 when the pandemic led to an immediate drop in spending for non-essential items, but prices quickly began to rise again once restrictions started to ease the following year.
The cost of models then peaked in mid-2022, before the market began to recover with new supply covering demand – a trend that has continued to this day.
getWorth produced another graph showing the change in car prices over the course of 2024, as seen below:
There is a clear trend across all price brackets that pre-owned car prices have consistently declined over the last year, though the demand for affordable sub-R250,000 cars means those models are dropping at a lower rate than segments.
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