ARE SOUTH AFRICANS LOSING THEIR LOVE FOR NEW MOTOR VEHICLES, OR IS EVERYONE JUST FEELING THE ECONOMIC PINCH?

Thursday, June 23, 2016

The National Association of Automobile Manufacturers of South Africa’s (NAAMSA) latest automotive statistics for sales from January to April in 2016 show a 10% decrease compared to the same period in 2015. 

 

“The economic downturn has certainly contributed to the fall in sales of new automobiles across South Africa during the first quarter of 2016. However, the market has seen an increase in used cars as consumers seek to downgrade to a less expensive vehicle. This could mean a lower value car which is cheaper to insure, as well as a more fuel-efficient car, enabling a total cost saving on the ownership of a car,” explains Derek Wilson, Head of South Africa’s leading online insurance and financial services comparison website, Hippo.co.za.

 

“The fact that double-digit new vehicle prices are estimated to increase by 12-15% this year and that another interest rate hike is expected are other contributing factors to the decline in sales,” continued Wilson.

Insurance providers in South Africa1 were recently quoted as saying that clients were abandoning both long-term and short-term products. Most cancellations were as a result of non-payment, indicating the strain on clients and challenges around affordability.

 

“Abandoning one’s motor vehicle insurance is certainly not wise and we urge customers to shop around both directly with insurance providers and also to use a comparison website like Hippo.co.za to complement their search in finding the right cover to suit their needs and budget. It’s estimated that approximately 60% of the cars in South Africa are uninsured and this exposes owners to risks that could worsen their financial situation should they be in an accident or if their car was to be damaged and needed repairs,” concludes Wilson.



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