Interest rates becoming less of a concern for South African car buyers
This is according to research conducted by TNS on behalf of Standard Bank, which focuses on the car buying habits of South Africans and their ownership of vehicles. Although 66% of South Africans still rely on vehicle finance to buy cars, they have become less sensitive to finance rates over the last two years. In contrast, the number of those fortunate enough to be able to pay cash for their new set of wheels has increased by 5%.
Nicholas Nkosi, Head of Vehicle and Asset Finance – Personal Markets at Standard Bank, says it is not surprising that 66% of car buyers needed finance to pay for their vehicles during 2013, given the drop in the value of the South African currency against major currencies and the increase in vehicle prices and parts. What is surprising, however, is that 32% of those purchasing vehicles managed to pay in cash, an increase of 5% from the figures recorded during 2011 and 2012.
The data also indicated that as consumers got older, their need for finance decreased. 67% of respondents between the ages of 45 and 54 reported that they financed vehicles, whilst 32% paid cash. Buyers aged between 55 and 64 were more cash flush with 38% buying vehicles for cash and 58% (9% less than the younger 45 to 54 age group) opting for finance. The 65-plus age group was even more inclined to pay cash with 68% of respondents saying they paid cash for cars, and only 32% financing deals.