One of the most surprising developments in the used-car space is that South Africans are continually buying more expensive cars regardless of the rising petrol prices the country is currently facing, said AutoTrader CEO George Mienie.
One often hears that individuals are downsizing to one-car households or selling their expensive rides for more affordable models in the face of sky-high fuel costs, but used-car sales data from AutoTrader indicates that the opposite is true.
In August, searches for sub-R300,000 cars on AutoTrader dropped by 11.5%, searches for vehicles between R300,000 and R600,000 were up 0.52%, and the over-R600,000 bracket saw a marked increase of 6.2% in searches.
Similarly, the sub-R300,000 segment experienced a meagre 1.7% uptick in sales, the R300,000-R600,000 segment 10.8%, and the over-R600,000 segment a noteworthy 14.8%. Used 4×4 sales also grew by 5% during this same time.
“Based on this, people are not downsizing, and are searching for and buying more expensive cars,” said Mienie.
Efficiency is still somewhat of a consideration for those who are looking for a R300,000-plus used car, however. Diesel searches rose by 9.5% in September while overall advert views for all cars only grew by 7.4%, with diesel being the more economical fuel type than petrol, but generally also the most expensive car to purchase.
Prosperity in the face of adversity
Despite new-car sales showing a year-on-year decline of 3.1% in August 2023, the number of used cars sold grew by 6% over the same period, and the cumulative value of used cars sold in 2023 thus far has now reached over R14 billion, reflecting an annual growth of 10.5%.
“This could be attributed to the value benefit pre-owned cars offer buyers, which makes pre-owned cars an attractive option,” said Mienie.
During the month of August, consumers paid R403,203 for a used vehicle on average, a 4.4% increase YoY, with an average registration year of 2018 and an average mileage of 78,509km.
“September 2023 results will be confirmed in a few weeks, but looking at the year as a whole, the used car market has performed better than last year with only May and June being marginally down YoY,” said Mienie.
Keyword: The real effect South Africa’s high petrol prices have on the used-car market