• 2021 will be pivotal for the long-term potential of the South African automotive industry.
•Consumers should always do their research before signing on the dotted line.
• There are many deals to be found as dealers are under pressure to meet sales targets.
New car sales in South Africa reached record lows during 2020, according to the latest Naamsa data. The market saw a decline of 29.1% which resulted in a total of 156 163 fewer units sold compared to 2019.
It was the lowest figure to be recorded in 18 years.
South Africans are still being hit hard by the effect of the Covid-19 pandemic on the economy. The loss of jobs, reduced income and uncertainty are contributors to the decline in sales as vehicle sales are closely linked to the economy's strength.
Many consumers are opting to purchase reliable used vehicles as their finances continue to be placed under pressure.
Carmaker's like Ford, have used cars through their 'Approved' dealers with vehicles that are a maximum of five years old with a 120 000km mileage limit. Each vehicle undergoes a stringent and comprehensive 160-point check, including mileage and service history verification.
They are sold with 12 months free roadside assistance and the balance of the manufacturer's warranty, service plan or maintenance contract, where applicable – thereby giving the owner confidence in the quality of vehicles sold. The customer can also purchase extensions to the warranty, service plan or maintenance plan.
Look out for good deals in 2021
"This year will be pivotal for the long-term potential of the South African automotive industry," says George Mienie, AutoTrader CEO. "After a particularly challenging 2020, dealers will be hungry for business and, as such, new car buyers can expect to land some good deals in 2021," he predicts.
"This won't necessarily apply to the used market. Because of the growing demand for used cars, the good quality stock is in high demand, and therefore prices are unlikely to drop. Buyers should still be spoilt for choice – with inventory levels in all price brackets remaining fairly high," Mienie adds. "Consumers should always do their research before signing on the dotted line."
"This advice extends to finance too. Shop around for the best-possible financing agreement and enlist the help of your dealer, who can usually get a better deal for you than your private banker," Mienie says.
Furthermore, Mienie advises consumers to pay off the car at the same rate at which the vehicle depreciates to avoid long-term debt. "This will help ensure that the value owed on the car is not more than it's worth," he says.
'Get periodic valuations on your vehicle for both trade and retail, and compare these values to the amount owed on your finance," he concludes.