Laws of supply and demand: Market data confirms used car price increase

Laws of supply and demand: Market data confirms used car price increase

“The laws of supply and demand drive up the price, inevitably, over time.” So said Anthony Kapel “Van” Jones, the American news and political commentator, author, and lawyer.

And this is precisely what we’re seeing happening in the used car market in South Africa right now; the price of the country’s top ten most enquired on car models has risen by an average of around R30,000.

This much has emerged from an analysis of the most enquired on models on AutoTrader in the first six months of 2021 versus the last six months of 2020.

According to AutoTrader’s CEO George Mienie, this is a tangible result of supply and demand. “According to the 2021 AutoTrader Mid-Year Industry Report, over 319 million total vehicle searches were conducted on AutoTrader during the first half of 2021.

“This was a record high, representing growth of 44% year-on-year. This increase in demand has – quite understandably – resulted in prices increasing,” he explains.

Thankfully for car buyers, prices have not increased by the same percentage as car searches. Take the Toyota Hilux, for instance – which was the most searched for model in the first six months of 2021 (it accounted for 3.6% of all searches and 11,5 million searches).

Its average price has risen by a mere 11.54%. The increase in average price for the Ford Ranger – the most sold used car in the 2020 AutoTrader Annual Report and the 2021 AutoTrader Mid-Year Industry Report – was even lower at R26,022, or a mere 7.47%.

While used car demand has pushed up prices, this has also been as a result of more restricted used vehicle availability. The 2021 AutoTrader Mid-Year Industry Report reveals that, in the six months ending June 2021, over 633,000 vehicles were listed on AutoTrader, with June accounting for the largest stock count.

Year-on-year there was a 4% reduction in available stock – meaning fewer consumers were selling vehicles.

Given this development, Mienie says it may be advisable not to delay a used car purchase. “If these trends continue – namely we see an increase in demand and a reduction in stock – used vehicle prices may continue to increase in the second half of 2021 too,” he concludes.

Rank Model Price (listed avg.) Year (listed avg.) Mileage (km listed avg.) Price (listed avg.) Year (listed avg.) Mileage (km listed avg.) Price Mileage
1 Toyota Hilux R369,979 2016 91,272 R412,688 2017 91,680 R42,709 408
2 Ford Ranger R347,926 2017 88,857 R373,948 2017 94,919 R26,022 6,062
3 Volkswagen Polo R218,047 2017 55,132 R232,535 2017 62,184 R14,488 7,052
4 BMW 3 Series R295,347 2015 93,599 R331,824 2015 93,649 R36,477 50
5 Mercedes- Benz C-Class R376,207 2015 83,977 R402,749 2015 89,579 R26,542 5,602
6 Volkswagen Golf R311,337 2015 85,381 R305,679 2014 102,403 -R5,658 17,022
7 Toyota Fortuner R396,323 2016 89,826 R505,575 2016 107,157 R109,252 17,331
8 Volkswagen Polo Vivo R166,895 2017 50,900 R176,947 2018 55,261 R10,052 4,361
9 BMW 1 Series R261,047 2014 93,507 R292,118 2015 96,654 R31,071 3,147
10 Isuzu KB R233,578.0 2014 132,360 R248,695 2015 138,916 R15,117 6,556


Share on facebook
Share on google
Share on twitter
Share on linkedin
Share on pinterest