::Barloworld ::Pre-owned vehicles sales
Pre-owned vehicle sales, like new vehicle sales, are a notable pointer to the health of an economy. Where vehicle sales are strong, the economy concerned is vibrant and growing. It means that people have money to buy cars, to replace them more often and to consider buying certain niche products like convertibles and sports cars, just because they can afford it.
Pre-owned vehicle sales had tended to become depressed a few years ago when South Africa experienced several consecutive years without car price increases. While the economy boomed and disposable income increased, car prices remained stable and many people could afford new cars. This caused less interest in pre-owned cars.
Now, new car prices are on the rise, the NCA has restricted access to ample credit, volatile oil prices have caused the fuel price to peak unpredictably and the global credit crunch has put a damper on consumer sentiment. All these factors have become more or less a “perfect storm” that had people seriously reconsider large purchases in the wake of all the uncertainty. Of course, a car, like a house, is one of those large purchases. Suddenly, people are keeping their cars for longer before trading them in. Then, when the time comes to replace the car, they frequently opt for going to pre-owned vehicle sales to save good money.
Of course, spiralling new car prices will put pressure on the used market, which means that pre-owned stockyards will clear more readily as people scurry for cover with a used car. Supply and demand means that pre-owned car prices will rise and heavy discounts will be harder to come by. However, buying pre-owned will always afford a good saving over buying new and, in the end, the forces will balance each other out again, as in any capitalist economy.
For the time being, pre-owned cars are still relatively cheap, but as the economy slowly recovers, prices will rise again and pre-owned vehicle sales will normalise. Now might be a good time to buy that pre-owned set of wheels.
