Local used car prices spike 17% since 2021

14 June 2022 - 08:41
By Motor News Reporter
Dealers have low new stock due to supply chain issues, which has hiked used-car prices.
Image: welcomia / 123rf Dealers have low new stock due to supply chain issues, which has hiked used-car prices.

Supply issues in the vehicle market and increased demand have boosted the price of used cars in SA in the past year. 

Gumtree reports that the average price of used vehicles in SA has risen 17.3%, from R178,911 to nearly R209,888, between May 2021 and May 2022. 

Nunben Dixon, head of Gumtree Auto, attributes this to supply issues exacerbated by the Russia-Ukraine conflict and an increased demand for used cars from cash-strapped South Africans. 

“Shortages of car parts have had a knock-on effect in the used car market," he says.

"Dealers have low new stock due to supply chain issues which started during the lockdown and were put under further pressure by the recent conflict. Flooding in Kwazulu-Natal has also impacted many manufacturers and production in recent months.” 

He says that global shortages are expected over the next one to three years.

“There’s a really high demand for used cars at the moment, and more options are available for private car owners that want to sell their cars, so we’re seeing a lower rate of trade-ins or even less desirable trade-ins coming into dealerships.

"In many instances, stock shortages mean that dealers can ill-afford to provide discounts and incentives to encourage new car sales,” he states.

"However, this doesn’t mean dealerships are profiteering. Dealers are often selling used cars at higher prices because they need to spend a lot more to acquire those used cars in the first place. Trade auctions are becoming feeding frenzies and we often see dealerships purchasing cars from private sellers on our site to keep their showrooms stocked. Market value is extremely high at the moment.” 

Dixon says that car owners may be surprised to see how much they can get for their cars. “We’ve heard from our customers that they are able to sell their car for a considerably higher price in 2022 than they were able to get in 2021.”

Dixon believes that both new and used-car prices will start coming down within the next year or so.

He said consumers should combat the high prices by negotiating aggressively and ensuring that they purchase reliable cars with low maintenance and running costs.

“Don’t cut corners by skipping services or delaying repairs as this will come back to bite you when you need to sell your car again, and always negotiate when it comes time to purchase,” he said.