USED CAR SALES
Car buyers look to go down-market
Demand for cheaper, second-hand vehicles rises as Covid-19 restrictions batter disposable income
Vehicle buyers are searching for cheaper second-hand cars as the Covid-19 lockdown in SA results in job losses and salary cuts.
This is according to AutoTrader, one of the country’s largest online vehicle sales portals, which says searches for second-hand vehicles under R50,000 have increased by almost 300% from pre-Covid-19 levels.
“Evidence from dealer customers show consumers trading down in all categories, including higher-income-level consumers,” said George Mienie, CEO of AutoTrader, based on data gleaned from the site’s 35-million car searches a month.
Vehicle-buying consumers surveyed on AutoTrader’s website during the first week of May 2020 show signs of financial distress, with 65% indicating that lockdown has negatively affected their financial wellbeing, and 30% of consumers saying they are under pressure to replace their vehicle within the next four weeks.
“The sooner consumers are allowed to trade with vehicle dealerships, the sooner their family’s financial pressures may be eased,” said Mienie.
Consumers had expected dealerships to be open and trading on May 4, as evidenced by the sharp increase in website traffic on that day, though by Wednesday afternoon the government still had not confirmed under what conditions dealers were allowed to trade under level 4 of the lockdown, he said.
“Inquiries to vehicle dealerships have increased by more than 150% compared with pre-lockdown levels,” he said.
The company added its voice to the motor industry’s submissions to the government to reopen vehicle trade as part of the relaxed Covid-19 lockdown, asking for all vehicle dealerships, both independent and franchise, to be allowed to trade under level 4.
Another online vehicle sales portal, Cars.co.za, also reflected a buying-down trend and reported that about 10% of site visitors surveyed are now looking for a more affordable vehicle.
The survey, conducted in the first two weeks of lockdown, found that about 25% of site visitors said the lockdown had affected their vehicle buying plans.
Cars.co.za spokesperson Hannes Oosthuizen said visitors to the site had decreased since the lockdown, but things had woken up after the announcement that motor dealers might be allowed to operate under level 4.
He said the top 10 most searched-for vehicles on the site remain largely the same as pre-lockdown, though there was some reshuffling in the ranks, with the BMW 3 Series notably moving up from sixth to second place.
The top 10 most searched-for vehicles on Cars.co.za since the start of lockdown:
1 VW Polo
2 BMW 3 Series
3 Mercedes-Benz C-Class
4 Toyota Hilux
5 VW Golf
6 VW Polo Vivo
7 Ford Ranger
8 Toyota Corolla
9 BMW 1 Series
10 Toyota Fortuner