Prices for pre-owned vehicles in South Africa have finally come down from the peaks reached during the height of the Covid-19 pandemic, and reputable dealers are once again advertising vehicles at their true market value, according to used-car platform Motus Select.
However, the company said “less-than-savoury” traders are still trying to take advantage of the high pre-owned prices of last year and the year before it, and attempting to sell vehicles at these rates.
“Prices in this specific market should have been reduced significantly in recent months. Therefore, it’s important to look at several different options before buying,” said Motus.
“This allows you to assess dealers and ensure you are paying for a reasonable price tag rather than one that has been intentionally increased for private gain.”
Why used car prices jumped
When the Covid-19 pandemic first hit, many industries around the world ground to a halt and this saw car production slow down significantly. Consequently, new-vehicle stock plummeted.
Compounding the problem was a global semiconductor shortage that is still affecting output to this day, as well as supply chain issues due to the varying levels of lockdowns from country to country.
In some cases, manufacturers decided to forgo certain nice-to-haves and sell their vehicles at a lower price just to get units out of the door. In others, high-end models were prioritised as these carry the biggest profit margins, or production was put on hold until all the necessary parts arrived.
“At the height of the global health pandemic prices were exorbitant, leaving many consumers out of pocket. Buying a second-hand car that would have been within their budget in the years prior was now almost the same price as a new car,” said Motus.
Used car prices before and after Covid. Credit: getWorth
Market trends
Motus’ comments were recently echoed by another used-car platform getWorth.
The company charted live market data taken from April 2019 to the end of 2022, which compared the “like-for-like” prices of the same vehicles over the period.
The trends showed that while vehicles in the higher price brackets are still in somewhat of a balloon, more affordable alternatives especially in the below-R200,000 segment are now nearer to their true market values than they were a year ago.
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