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Many South African motorists are caught in a difficult situation – between the reality of needing a car to get to work and the worrying state of the economy as a result of declining growth and sovereign credit downgrades. An unstable economy will inevitably make people worry about the future direction of the cost of credit, the security of their jobs and the squeeze on disposable income as inflationary concerns bite.
This series of factors has hit the new car market quite badly, with sales in April plummeting 13.4% month-on-month and a whopping 25.5% year-on-year. And yet, of course, people still need to get around, so this drives people into the used car market, which itself has seen notable inflation as a result.
Declining sales are obviously a great motivation for manufacturers and dealers to look at their margins and to create deals to shift stock and there are some genuinely great offers out there, as well as “trade-in assistance” on used cars, which basically subsidises the trade-in to make a new car more affordable.
