Lockdown sees an increase in people selling their cars privately
Lockdown has had a big effect on the motor industry, and the most interesting is the increase in private listings by motorists wishing to sell their cars.
July 2020, for instance, saw a 139% increase in people selling privately (year-on-year) while there was a 136% increase in August 2020.
This has emerged from an analysis of search and sales data on AutoTrader.
AutoTrader is the largest digital automotive marketplace in SA, and , it provides unparalleled insight into car buying patterns in the country.
According to George Mienie, AutoTrader CEO, this increase in private selling is unusual.
“It goes without saying that 2020 has probably been one of the most traumatic years in the history of the automotive business as lockdown has seen both production volumes and sales tumble. Not only here. It is a global phenomenon,” he says.
Lockdown levels 5 and 4 were especially disruptive for the motor industry, with new car sales plummeting. The 2020 AutoTrader Car Industry Report also revealed that, during the Covid-19 pandemic, 57% of in-market shoppers said they were holding off on purchasing a car.
Things improved slightly in lockdown level 3.
“Supply increased by 21% while lockdown level 2 has recorded an increase of 1%,” Mienie reveals.
Coinciding with this, July and August 2020 suddenly saw a noticeable increase in listings for private sales.
“In fact, in the year to date ending in August, private listings have experienced a 54% increase (year-on-year),” Mienie reports.
He believes this is a clear indication of the financial distress experienced by many South Africans.
“They are seeking to make as much money as they can from the sale of their cars,” Mienie says.
"In their desire to make money, they are using AutoTrader, which is not a free listing website.
“There are free options out there. One reason for this trend could be that consumers want to receive quality leads from genuine buyers. This is why AutoTrader has been the most trusted motoring marketplace for 28 years,” says Mienie.
“There are pros and cons to both options - private selling or working through a dealership. Sellers sometimes opt for private sales because they believe they will make more money. This may be true, but sellers would be well advised to exercise extreme caution. Sadly, there are lots of fraudsters who are good at relieving sellers of their cars and then never paying for them. Plus, the paperwork and administration can be prohibitive,” Mienie warns.
For these reasons, many motorists opt to sell through a dealer instead.
“This can sometimes be a more attractive proposition because it comes with peace of mind and safety. Ultimately, buyers may also be willing to pay more when shopping at a dealer because the car may be sold with a warranty, for instance. Hence, the dealer may be willing to pay a slightly higher price for the stock,” Mienie says.