Business#OFMBusinessHour: Is this a good time to purchase a brand new car?
─── 18:56 Tue, 23 Nov 2021
Transunion’s vehicle pricing index has found that there is a significant drop in prices for brand new vehicles in the third quarter of 2021 as compared to the same period in 2020.
But this doesn’t mean one should purchase a new vehicle when they cannot necessarily afford the overall cost of owning and maintaining it.
TransUnion’s Vice-President and head of TransUnion Auto & Consumer Africa Kriben Reddy, says vehicle dealers and manufacturers are holding the prices of brand new vehicles back to up demand, this is despite a shortage of new vehicles internationally due to an ongoing lack of semiconductors and the Covid-19 pandemic. He says there is a threshold in which new vehicles can become unaffordable, hence prices being held back for them. The price of used vehicles on the other hand has increased due to a higher demand from consumers who are forced to shop for vehicles in the used market. This increased demand also means, there is now a shortage of used vehicles, hence the higher prices.
Previously on the OFM Business Hour, Reddy said that their latest Consumer Pulse Survey revealed that over 61% of households are feeling the burden of the Covid-19 pandemic on their pockets in 2021 as compared to over 80% in 2020, at the height of the pandemic. This means that more indebted South Africans are relying on credit just to get by. The shift towards used vehicles corroborates the housing survey.
Reddy says whilst there is still a heavy reliance on private vehicles due to South Africa’s unstable transport system, many options are coming to the fore. E-hailing services are becoming more sophisticated and there are more options for individuals who are more interested in mobility rather than the outright ownership of a car.
He stresses it’s important to factor in the overall cost of owning and maintaining a vehicle when seeking to purchase one. He says consider the prices of insurance, tyres and other maintenance related aspects.
#OFMBusinessHour: Is this a good time to purchase a brand new car?: