::Barloworld ::Used car sales
Used car sales have been under pressure of late. It started in 2007, when the National Credit Act restricted access to credit and depressed vehicle sales in general. In was inevitable, really, because the old system allowed for accumulation of debt that buyers could not service and the new system largely does away with that. In retrospect, it also save our banks from going out of business, as banks are wont to do on the global market, nowadays…
Then, as sales started to recover in 2008, the world economy went for a loop and we were back to square one. We have not quite recovered from the effects of the NCA and then…
- the price of oil spiked,
- the global credit crunch happened and
- interest rates spiralled upwards. As if there were not enough cataclysms for the used car market to survive,
- bank repossession went up to over 7 000 per month, and started to add enormous numbers of cars to the local pre-owned car park.
The sheer numbers of used cars out there has therefore depressed used car prices making used cars sales rediculously expensive, and these will not recover until
- new car prices increase again, which has started to happen already, and/or
- used stock levels drop, which it won’t while repossessions are high and credit hard to get
It is a storm that we will just have to ride out – everyone is in the same boat. We have better prospects for 2009 even if what is meant by that is that we have hit rock bottom and things should at least not go worse. In fact, by the end of the year things should improve. Analysts are very optimistic that the global economy will start to recover towards the latter part of 2009, and that the global car market will be back to good health during 2010.
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