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VALUED: The demand for used cars has risen by 300% compared with new cars.

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SOARING demand for used cars has resulted in some of the vehicles not losing value. Some of the cars are being sold for between 70% and 110% of their original prices, according to a car dealership owner.

It is simple economics that a new car loses about 30% of its value once the vehicle has been driven by a consumer out of a dealership.

"In South Africa it does not work like that because used cars do not lose value and their value have stabilised," said Derik Scorer, who owns the country's largest Arnold Chatz Cars dealership.

"The gap between used and new cars has narrowed and there are instances where you find that the price of a used car hovers between 70% and 110% of its original price," said Scorer.

Keith Watson, Standard Bank's head of sales for vehicle and asset finance, concurred saying that the price of some newer used cars was "static". Watson said this could be because the demand for used cars was 300% higher compared to new cars.

Watson said there was unlikely to be price movements on vehicles that were less than six months old.

"This shows that there is a demand for the used vehicles, a consumer appetite which was not there," said Watson.

Brian Smith, used fleet and rental manager at Renault SA, said the value of some used cars was not deteriorating because of a high demand.

"The low interest rates have driven up the demand for used cars and it is quite possible some of the prices of the vehicles at some dealerships have not moved down," he said.

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Comments

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Wed May 22 15:50:43 SAST 2013 ::

Sep 28, 2012

Honeybadger

Tough times. Its funny how the price of used cars seems never to follow a specific pattern. Could it be because of the mismatch in information between the market participants?
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Sep 28, 2012

skwamasamabele

I am not surprised, new cars are more expensive in SA than un the UK. for example, Jarguar XJ is R300 000 more expensive in SA than here. I bought a 2010 Bentley Continental GTC for R400 000 less than in SA. Dealers are criminals, the govt need to review car prices in SA
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Oct 1, 2012

nofavours

i really need one hle?
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Oct 1, 2012

Doctor247

@skwamasamabele
Bra, right? And the shipping cost? How much was it?

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Oct 1, 2012

WarrenG

In South Africa we get robbed on what we pay for used vehicles! It's daylight robbery. We should be paying 60% of what we currently pay. The public protector must investigate this because we're being ripped off and someones having a laugh
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Oct 1, 2012

Seja-Bana

the car dealers are full of nones@nse, they are robbing customers legally..............by contract.
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Oct 1, 2012

BinoBanga

yesthe demand for used cars is high. we just have a problem withsellers who r at times behaving like Taxi drivers in Modjajdiskloof!!!
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Oct 1, 2012

Miss-eighty

Doctors247, shipping cost depends on the size of the car. If you get a good clearing agent in SA and a container you are sorted. For a standard car from Ireland to SA you will be looking to spend overall R15-17000 incl clearing agent fee.
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Oct 1, 2012

siphok

Everything is overpriced is SA thanks to our government. A middle class earner receives about a third of his annual parkage. A toyota Tazz is still over R50 000 and you ask yourself y? isnt because blacks buys it a lot for its reliability or just greedy of dealers. A BMW 3 series is assembled or manufuctured in Rosslyn and exported in the whole world but it is a litle expensive it should be selling at a 30%less of its current trading value. Export duty my foot. BMW uses SA to strategically manufucture the car because of the countries cheap labour, readily available resources and export it to the rest of the world, ask yourself ? The 320i is still cheaper though what a nice entry durable car, hence it has populated the streets...
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Oct 1, 2012

Doctor247

@Miss-eighty
Thanks. Quiet reasonable than I thought.
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