South Africans are paying nearly 15% more for their favourite cars in 2023 than in 2020, depending on their chosen body type.
TransUnion South Africa recently published a report on the current state of the auto industry and how the market has shifted over the course of the last three years.
The findings will likely not surprise most consumers, as the dramatic rise in vehicle prices is just one symptom of the country’s high inflation rate, which is affecting the cost of everyday items from food to fuel.
More popular than others
In addition to a general overview of the industry, TransUnion’s report gave a detailed breakdown of how different vehicle body types have increased in value, on average, since the pandemic started in 2020.
The South African landscape has shifted towards the crossover and SUV shape in recent times, though hatchbacks continue to be popular as well, thanks in large part to their relative affordability.
In fact, hatchbacks and SUVs accounted for 47% of the vehicles financed in the last three years and as much as 70% of all financed models in the first quarter of 2023.
Sedans were noted as having the biggest drop off in new sales, though they have seen a corresponding increase in used purchases, which is attributed to global supply constraints of other body types.
The infographic below provided by TransUnion shows how much prices of used cars have gone up over the last year, based on their age and body type.
This means that, on average, car prices went up by 5.7% between 2020 and 2021, 8.3% between 2021 and 2022, and 10.2% between 2022 and 2023.
Furthermore, the report provided the most recent vehicle price index (VPI) figures for each body type, which measures the relationship between the increase in pricing for new vehicles from a basket of passenger cars that incorporates 15 top volume manufacturers, according to TransUnion.
You can see the VPI for each vehicle body type below:
- Hatchback – 5.9%
- Crossover – 7.7%
- Small SUV – 7.1%
- Mid SUV – 11.4%
- Premium – 5.5%
For context, the consumer price index (CPI) – a measure of general inflation – for the first quarter of 2023 was 7.0%, which means that new crossover and SUV prices are currently going up at a faster rate than the market average, while hatchbacks and premium models are increasing at a slower rate.
An even better representation of the rising cost of vehicles can be found when comparing data over the course of the last 12 months:
| Index | Q1 2022 | Q4 2022 | Q1 2023 |
|---|---|---|---|
| New VPI | 6.4% | 7.8% | 6.3% |
| Used VPI | 7.2% | 12.5% | 8.1% |
| CPI | 4.7% | 9.0% | 7.0% |
When the vehicle price index is averaged across all body types, we can see that new cars have been roughly keeping pace with the CPI, with a higher average in the first quarter of 2022 and 2023, and lower in the final quarter of 2022.
The more notable distinction is with used models, where the VPI has been consistently higher than the consumer average – indicating an increase in demand as more consumers shift towards the pre-owned space in search of an affordable purchase.
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