Pre-owned vs. brand new

Pre-owned vs. brand new: The pros and cons 

New car sales have seen a notable decline over the past 12 months in South Africa due to a prolonged economic downturn across several sectors. As a result, customers looking to buy a vehicle now seek more affordable mobility alternatives, such as pre-owned cars across all relevant segments.

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According to Naamsa's monthly car sales data, there has been a noticeable decline in new car sales throughout the country. According to WesBank’s Business Intelligence data for the first half of 2024, applications for pre-owned cars have outpaced new car applications by a ratio of over two to one. That said, Wesbank only received 337,061 new vehicle finance applications in the first six months of this year, and within the same period, it noted a significant 688,316 pre-owned vehicle finance applications. 

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This increase can be attributed to the affordability of pre-owned vehicles over new cars. Used cars are usually cheaper than new ones because they lose value over time. However, some rare models, like classics or collector’s items, can increase in value because they are difficult to find and many people want them. Unfortunately, there are also drawbacks to purchasing a pre-owned vehicle. The maintenance or service plan, as well as the manufacturer's warranty, may have expired or be close to expiring. This means the new owner will have to pay for any repairs or maintenance themselves.

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Not only that, but the condition of the car also matters, as it will determine how the previous owner maintained it. This is why it’s crucial to buy pre-owned vehicles from a reputable and trusted dealer whom you can trust to have conducted the required checks to ensure the car is in its best condition. Another drawback is that pre-owned car buyers must purchase the car with the features originally specified by the first owner.

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On the other hand, new car buyers don’t experience any of that, as they have the freedom to configure their vehicle according to their specific requirements to match their taste and budget. Also, brand-new cars mostly come standard with comprehensive warranties and service plans, which adds a layer of peace of mind for the first few years of the vehicle's ownership. In a nutshell, new car benefits, lower interest rates, and more affordable models are expected to grow the new car market, which remains a crucial part of SA’s economy.

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