Johannesburg – The Covid-19 pandemic has not only disrupted the new vehicle market, but it has also turned the used car market on its head.
With new cars being in short supply due to a number of disruptions, including the global chip shortage, used-car prices increased as more buyers were forced into the second-hand market.
However, according to GetWorth, used-car prices are finally ticking downwards again as the new car supply improves and consumer confidence takes a knock due to higher fuel prices and interest rates.
Getworth has released a graph showing how used-car prices in various price ranges up to R800 000 have fared over the past three years and while prices are still relatively high compared to the pre-Covid-era, there is a definite downwards trend in most sectors of the market.
Interestingly, the R100 000 and R700-800K price bands are showing the sharpest declines while the R200 000 category is the only segment still growing in price, albeit marginally.
“Price-levels remain high compared to two years ago, so car sellers can still get a decent deal – just not what they would have received at the peak,” said GetWorth chief financial officer, Colin Morgan.
“But it is good news for used-car buyers. Buying a pre-owned car remains a sound financial decision as the vehicles are much more affordable than the equivalent new cars. High interest rates also make that a big factor.”
Getworth, which is an online buyer and seller of used cars, says its price tools are based on artificial intelligence and live market data; and the algorithms are able to separate the effects of mileage and time to expose the real underlying price trends.
The company’s takeaway?
“With the market turning, sellers are no longer in the driver’s seat, but for car buyers there are good deals available,” Getworth said.