New data provided by Transaction Capital’s interim results show the average age and price of a second-hand car sold by the retailer, WeBuyCars.
The company, which has a controlling stake in WeBuyCars, reported strong growth for the car dealership – with headline earnings up 58% from the year before.
Transaction Capital added that the outlook for the used vehicle market in South Africa is resoundingly positive.
The report showed a significant shift in interest from new to used vehicles. Used car sales in the 2022 financial year grew 4% compared to pre-pandemic levels, while there was a 28% increase in the number of online searches for used cars compared to the year before.
WeBuyCars pointed to the affordability and the effects of Covid-19 on consumers’ disposable income as indicators of why used car sales have improved. The company added that banks have also put liquidity into the used vehicle market as they seek growth.
WeBuyCars said that in 2020, 23% of households used personal vehicles as their primary mode of transport, marking a positive shift from passengers to owners and more vehicles being needed across the board.
WeBuyCars stated that the majority of vehicles it sold were above nine years old and cost less than R200,000.
As used vehicle sales rose, new vehicle sales suffered, with the retailer adding that sales of new passenger and light commercial vehicles in South Africa declined by approximately 2% compared to pre-pandemic levels in 2020.
“The microchip shortage and supply chain disruptions, which have been exacerbated by the Russia-Ukraine war, continue to affect the global supply of new vehicles, providing an added tailwind for the used vehicle sector,” said WeBuyCars.
The new vehicle market in South Africa is expected to gradually recover during the year, but at a slower pace, with the number of used vehicles traded continuing to exceed the number of new vehicles traded by more than 2.5 times, said WeBuyCars.
In 2021, roughly 1.2 million (32%) of the used vehicles sold by WeBuyCars were financed. Models selling for more than R300,000 saw an increase in people needing financing, while deals below R200,000 saw a decrease.
“WeBuyCars continues to disrupt used vehicle ownership and trade in South Africa through a unique combination of vehicle trading via its e-commerce and physical infrastructure, together with finance, insurance and other ancillary products,” said Transaction Capital.