Used vehicle prices in South Africa have continued to climb for the 12th consecutive quarter, according to TransUnion’s latest vehicle pricing index (VPI).
The index effectively measures the inflation rate for new and used vehicle pricing from a basket of passenger vehicles from 15 top volume manufacturers, using vehicle sales data from across the industry.
The VPI for used vehicles in the country has increased from 3.7% in Q1 2021 to 7.9% at the end of Q1 2022, meaning used cars are becoming more expensive at a faster rate.
In stark contrast, the VPI for new vehicles decreased from 8.8% last year to now be 4%, which means prices for new cars are still rising, but at a much slower rate than before.
Consumer affordability
TransUnion attributes much of the inflation in the used market to the push for and limited supply of quality pre-owned vehicles.
The used-to-new ratio in this quarter went up to 2.2 used cars financed for every new car – compared to a ratio of 2.4 to one at the same time last year – and this is expected to further increase in the upcoming quarters, said the company.
The over-R300,000 finance band also remained the most popular price range for local car buyers to apply for finance, albeit at lower volumes than in previous periods.
“The interest rate and hefty fuel hike in the first quarter did little to dampen new vehicle sales as consumer demand continued to decrease the total cost of ownership,” said TransUnion.
Buying patterns
Consumer buying patterns in the first quarter of 2022 indicated more than 32% of total new and used vehicles financed were hatchbacks, whereas 20% were SUVs.
Sedans saw an unexpected rise in market share, too, but this is primarily due to used inventory being bought up where the supply of other body styles is constrained, said TransUnion.
Almost half (48%) of all cars were then financed by buyers aged between 26 and 40 – with a larger percentage opting for used vehicles.
As usual, Toyota and VW remained the leaders in market share in both the new and used categories, although Hyundai and Suzuki also experienced a great quarter in the new-car segment to now have shares of 10% and 8%, respectively.
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