Escape The Soaring Prices Of Pre-Owned Vehicles

As specialists in selling second-hand vehicles, Liquidity Services can help you avoid paying escalated prices in a high-demand market – unlike that of car dealerships.


Demand for high-quality used vehicles surged in 2021 and is looking to continue in 2022. These prices are rising faster than that of new cars as a struggling economy has created a high demand for second-hand vehicles.


According to TransUnion Africa, the latest vehicle pricing index (VPI) for used vehicles rose sharply from 1.6% to 4.9%. VPI measures the relationship between the increase in prices for new and used vehicles. It is expected to soon surpass the new vehicle VPI, which rose from 6.1% to only 6.5%.


One reason for this phenomenon is 2020’s level 5 lockdowns, 2021 level 4 lockdowns and 2021’s civil unrest, which all created both demand and supply issues. “This is largely due to motor manufacturers suspending operations and supply chains coming to a halt,” said Kriben Reddy, vice-president of auto information solutions for TransUnion Africa. The knock-on effect of the lockdowns and civil unrest on new-vehicle supply was a recipe for future used-car price inflation as the vehicle fleet in SA ages and consumers buy up good, clean used car stock rather than new.


Another reason is the growing trend of consumers downgrading from a two-car household to one slightly more expensive vehicle. This further floods the used car market and is expected to continue in the upcoming months as vehicle prices increase.


The way to avoid paying car dealerships’ inflated prices is to buy on auction. Auctions are the best way to purchase vehicles at a fair market value. Realistic reserve prices are set, and the selling prices represent what buyers are willing to pay, not what sellers are demanding. Liquidity Services SA regularly holds very successful auctions of a wide array of vehicles, from entry level run-arounds to higher end models. With viewing days prior to the auctions, detailed descriptions, and multiple photographs on our online marketplace, AllSurplus.com, buyers can be confident in their purchases as if they were purchasing directly from a car dealership.


So to avoid the inflated second-hand vehicle prices in a high-demand market, consider buying on auction and ensure you purchase a vehicle at fair market value.

Partially sourced: https://www.businesslive.co.za/bd/life/motoring/2021-08-05-sa-used-car-prices-rise-sharply/

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