More A to B for Your Buck
As more and more studies reveal how consumers and rental companies are turning to used cars for financial relief, the extent of the disparity between the average disposable income and the cost of living becomes ever clearer.
The price of a new car has gone up 4.9% from last year, making buying a brand spanking car unaffordable for most. Accordingly, this can be seen as a distinct warning sign that businesses and consumers are finding expenses increasingly unmaintainable in South Africa.
Rental About Used Rides
Tourist figures have dropped, causing rental companies to stretch the lifespan of their rental cars, instead of replacing them at a certain point. Wesbank affirmed that the rental market has dropped 19%, as compared to May.
This reduction in car sales can possibly be attributed to low consumer confidence. Furthermore, experts warn that, before the end of next year, we can probably expect interest rate hikes.
Year on year (y/y), there has been a 6.6% (4.8% in total) monthly decline in new car sales, as per the National Association of Automobile Manufacturers of South Africa (Naamsa).
Second-Hand is First Choice
Despite being under incredible financial strain, y/y increases of 11.8% in credit application forms, 9.3% in new car applications and 4.9% in used car applications show that consumers clearly desire to purchase vehicles.
However, used cars are evidently preferable these days, as the cost of buying a new car is simply out of most individuals’ price range in the current economic climate.
