Growing demand for used cars slows new vehicle sales

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WesBank’s data also indicates that August’s weak new vehicle sales were driven by this year’s predominant trend: customers shifting to the used market. A total of 133,094 vehicle finance applications were received last month – year-on year growth of 3.7% – and the highest number of applications received for any month of 2016, so far. However, within this there was an 11.1% decline in applications for new vehicles, due to the shift to the used car market. Here, demand for used vehicle finance grew 11.2%, resulting in the used-to-new vehicle ratio growing to 1.67:1.

Buyers financing new vehicles are spending more than ever before, with the price of a new vehicle financed in August at nearly R297,000 – an increase of 13.4%, year-on-year. Demand in the used market drove up prices of pre-owned cars by 9.2% during the same period, with the average used deal now sitting at just over R190,000.

Exports offered a glimmer of hope, however. August's figure of 35,620 was nearly 27% higher than last year's 28,112. That took the year-to-date total to 232,324, up 3.1% from 225.415. This good news comes after numerous months of slowing growth.