The TransUnion Vehicle Pricing Index (VPI) for the first quarter of 2013 indicated that used passenger vehicle price inflation slipped further into negative territory to -1.4%, a significant drop from the 3.6% rise in price inflation in the same period last year.
This contrasted with Q1 new car price inflation, which continued to climb steadily at 2.4%, slightly up from 2.1% in Q4 2012.
Issued quarterly, the VPI is calculated from data received by vehicle risk intelligence company TransUnion on vehicle financing registrations from South Africa’s major banks and vehicle finance houses. The VPI also includes monthly sales returns from thousands of dealers throughout the country.
“Despite the widening gap between new and used passenger vehicle prices, there has been little relief for used market dealers as new vehicles continue to find increasing favour with consumers,” said TransUnion Auto Senior Vice President Mike von Höne.
This trend is evident from TransUnion’s used vehicle financial registration statistics, which are based on data received from South Africa’s leading vehicle financing institutions, verification enquiry volumes and dealer sales returns.
This shows that the ratio of new vehicles to used passenger vehicles financed is narrowing. From an average ratio of 1.79 used cars for every new car financed in 2012, the used to new ratio dropped to 1.48 in February this year – its lowest level in more than four years.
“The result is that used dealers are buying and selling used units at ever lower prices – an indication that used car price deflation is likely to continue for the next few months. Nevertheless, the used market did experience positive overall growth in the first few months of this year.
“Given the weakening of the Rand – which could result in a slight acceleration of new vehicle price inflation – along with fuel price hikes and the inevitable introduction of toll fees for Gauteng motorists – it’s possible that the pendulum will once again swing back in favour of used vehicles in the current year,” von Höne added.
As a global leader in information and risk management, TransUnion creates advantages for millions of people around the world by gathering, analyzing and delivering information. For businesses, TransUnion helps improve efficiency, manage risk, reduce costs and increase revenue by delivering high quality data, and integrating advanced analytics and enhanced decision-making capabilities. For consumers, TransUnion provides the tools, resources and education to help manage their credit health and achieve their financial goals. Through these and other efforts, TransUnion is working to build stronger economies worldwide. TransUnion reaches businesses and consumers in 33 countries around the world. Based in Johannesburg, with global headquarters located in Chicago in the US, TransUnion is one of Africa’s oldest credit bureaus. Visit www.transunion.co.za or www.mytransunion.co.za for more information.
TransUnion Auto Information Solutions is South Africa’s leading provider of information solutions for the automotive industry. The company has built its reputation as the trusted source in vehicle risk intelligence over many decades, producing vehicle values for the motoring and associated industries for 50 years and vehicle verification reports for 30 years. http://www.transunion.co.za/za/business/industrySolutions/automotive.html