Data from information and insights company TransUnion shows that South Africa’s car market is in flux. A growing number of households are opting for one multipurpose car instead of maintaining multiple cars, with many substituting their transport demands with ride-hailing services or using subscription services
As a consequence, sales of both new and used cars are suppressed. What is interesting though, is the number of consumers buying second-hand cars that are more than five-years-old. WeBuyCars reported in May 2024 that the average age of cars that they have traded recently is nine years.
King Price Insurance data confirms this trend, with quotes done for new vs. pre-2019 models, from November 2023 to May 2024, are on par. Another insight to note is that owners of old car models see the value of having comprehensive car cover, with 85% quotes done for such cover.
“Comprehensive car insurance is the responsible choice. It covers you for accident damage, theft and hi-jacking, and your liability for damage you accidentally cause to other people’s property, which can run into millions of Rands. If you can’t afford to cover these costs out of your own pocket, comprehensive insurance is the only way to go, no matter when your car was manufactured.” In addition, comprehensive insurance is compulsory if your car is financed.
King Price’s client experience partner Wynand van Vuuren shares some tips for those in the second-hand car market:
Do the maths: Check your budget for affordability, and factor in interest rate hikes if you’re going to finance a car. If you opt for a balloon or residual amount, you need to be able to pay the outstanding balance when it becomes due. You may also need to weigh up buying a maintenance or service plan vs. saving for these costs.
Take it for a test drive: Listen for any strange rattles or squeaks. Make sure all the features work properly. The Consumer Protection Act dictates that sellers must disclose all defects, but a legal dispute will take time and money to resolve.
Make app’solutely sure: FirstCheck tells you a car’s current market value, its full service and accident history, whether it’s been stolen, and who owns it, as well as whether it’s still under finance, which affects whether it’s legally allowed to be sold.
Inspect everything: Having a car inspected by an independent party, like the AA, could limit unexpected repair and maintenance expenses down the line.
If you’re in the market for a second-hand car, these points should help prevent an affordable option turning into a high-cost headache, says Van Vuuren.
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Author: Nhlalenhle Dlangalala from ByDesign Communications (Block E) on behalf of King Price Insurance.
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