Why pre-owned car sales are booming globally

The used car (or pre-owned) market is booming. And, a great deal of pre-owned sales (R10.2bn in car sales in January to be exact), occur for two reasons; one, supply; and two, demand.

The National Association of Automobile Manufacturers of SA (NAAMSA) states that in January 2020, the new car market saw an -8.1% decrease in sales compared to the same month of the previous year. However, in a recent press release, NAAMSA further stated that the “automotive industry across the world is currently experiencing unprecedented challenges due to the global lockdowns implemented across all major auto manufacturing countries and cities to flatten the COVID-19 curve.” And South Africa is no exception. The global lockdown, which is undoubtedly a major contributor to the economic challenges the country is facing, has already seen a decline of 29,7% for new car sales in March alone.

Can we, however, attribute the sudden decrease in new car sales solely to the COVID-19 pandemic? After all, used car sales are going up. The answer is not clear cut. However, what we can say is that global consumer patterns are definitely shifting from new to pre-owned cars.

In the United States, statistics show that used light vehicle sales completely outperform new car sales. In 2019, for example, sales for used cars came to 42.7 million dollars, whereas new car sales reached just over the 17 million dollar mark. In the United Kingdom, 2019 saw its lowest registrations for new cars in 6 years with a steady decline in registrations for the 3 previous years.

Globally, it seems that people are shifting their buying behaviour. It could be the fact that millennials (and Gen Z) tend to put more miles on their cars than the baby boomers ever did (which means they keep a car for longer). Or, it could be that later generations simply do not want to lay out big amounts of cash for flashy cars. An article by Lance Eliot (2019) opens with, “The automotive industry is not very happy with Millennials and Gen Z”. Eliot attributes this to a changing mindset about cars as well as the idea that driving is not fun because it is a chore that comes with a whole lot of responsibility. One of Eliot’s more interesting points, however, is the new generations’ shift to a more responsible lifestyle.

It is at this point that we consider another reason for the increase in pre-owned car sales; they are affordable and a responsible choice. Even purchasing cars at auction is a good idea! As long as you know your budget, are aware of the conditions of sale and have done your research, the auction option is open and ready for your bid. Additionally, purchasing at an auction is just as easy as purchasing online. And nowadays, you can bid online too.

SA Auction stays ahead of market and industry trends. We cater for the online savvy auction buyer as well as for the new generation buyers that want to stay at home and browse our online store for that perfect purchase. Browse our online store regularly for an array of vehicles on sale or offered on auction.