Around 174 000 used cars were financed in South Africa in the first seven months of 2015, says Absa Vehicle and Asset Finance managing executive Wessel Steffens.

This is 5.35% lower than the number of used cars financed for the same period in 2014 (183 563 units), and 14.15% higher than the number of used cars financed for the first seven months of 2013 (152 203 units).

“We measure the number of used cars financed, as there are no accurate statistics available on the actual number of used cars changing hands,” notes Steffens.

This means used-car sales funded through, for example, personal loans and savings, are excluded from the statistics.

New-vehicle sales in South Africa have declined by 2.5% for the first seven months of this year, compared with 2014.

Despite the decline in formally financed used-car sales in 2015, the ratio of used passenger cars to new passenger cars financed over the last three years has seen an increase, notes Steffens.

“Growth in new-car sales has remained fairly subdued over the last three years.

“Constrained economic growth, an increase in financial pressure on the consumer and deterioration in the consumer confidence level have meant that vehicle sales have come under pressure. The pressure is seeing a change in preference from new to used passenger cars.”

The current ratio of used cars to new cars financed is 1.78:1. This means that for every new car financed, just fewer than two used vehicles are securing finance.

Steffens expects price increases of around 2.4% on used cars this year, compared with expected new-car price increases of between 5% and 7%.

The average price increases for used cars and new cars in 2014 was 1.1% and 7.2% respectively.

Looking ahead, he says, the used car market is likely to fare better than the new-car market in 2016.

“We expect the used-car market to remain fairly flat during 2016, but to hold up better than the sales of new cars,” says Steffens.

He believes 2015 is a good time to buy a used car, depending, however, on consumer budgets, requirements and preference.

“The used-car market is substantial and used-car sales contribute significantly to the economy,” he adds.

According to figures sourced from Statistics South Africa, Absa estimates that used-car sales represent 38% of total motor trade sales by value.

“It must be noted, however, that these figures relate to vehicles sold through dealers and ignore the used cars sold privately and through informal channels.”