Consumers are just around R7,000 short on their budgets every month - more than the cost of owning an entry level car
Consumers are just about R7,000 short on their budgets every month — more than the cost of owning an entry-level carThe used-to-new vehicle ratio has increased post-lockdown. For every new vehicle financed, 2.31 used vehicles are financed. Picture: SUPPLIED
The financial impact of the Covid-19 pandemic, which has seen the unemployment rate rising above 30% in SA, has consumers either forgoing vehicle purchases or looking to buy down from new to used vehicles, says TransUnion. Average used-car prices have increased at a lower rate than new cars, with pre-owned vehicle prices rising 3.1% in Q2 2020 compared to 1% in the same period last year.
The percentage of cars being financed has seen a movement towards vehicles under R200,000. Picture: DENIS DROPPAemissions taxes introduced in April, and significant exchange rate deterioration. In the first half of the year the rand dropped from R14 to R18.30 against the dollar , from R18.50 to R22.50 against the pound, and from R15.70 to R20 against the euro.
The local motor industry was shut down during April, was at minimal capacity in May and only resumed full operation in June, and local new-car sales are expected to decline by about 25% this year. As vehicle pricing continues to increase while consumers come under increased financial strain, local car dealers are set for a challenging second half in 2020, says Reddy.
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