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Thread: Car Prices in RSA

  1. #1

    Default Car Prices in RSA

    We are being fleeced, we all know that. An entry level X3 in the USA goes for $30.300 SOURCE .

    What i want to know is why.

    How are these cost structures arrived at ?
    We export many BMW and lord knows what are brands yet the destination countries are able to sell them much cheaper than whats available down here.

    How come ?

    Does anyone in the forum know more ?

  2. #2

    Default

    Because these companies have unspoken agreements between them to keep the price high. I read a article once about this. The crux of the matter is when the rand weakend a few years ago all the car prices went up, but when the rand strengthend they did not come down. When asked why they haven't, the one supplier i think it wus merc said: "It would be unfair to existing customers as the value of their vehicle will decline dramaticaly..."

    Atleast thats what i rmemeber from the article.

    SA is full of the corrupt.
    |_0

  3. #3
    Super Grandmaster
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    Default

    Aye - the rich get richer and the poor get poorer, but nowhere so bad as in Africa.

  4. #4

    Default

    The one thing i have noticed though is that we continue to support these prices by buying. Not that we have a choice, we have no viable public transportation system.

    I know about a judgement by the competition tribuanal against one of the car companies but I just cannot remember what company it was. Yet car prices continue at the high levels.

    Someone once mentioned about an entity called the ombudsman, <<-- I wonder what role does this creature player in the motor industry.

  5. #5
    Super Grandmaster
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    Default

    The devaluation theory is unfortunately very sound.

    Take me as a tiny example. My car will finally be paid off after 56 months - in that time, I will have paid almost 2 times it's value. I'll get back 1/2 of that if I sell when I eventually own the car outright.

    If the car prices were to drop overnight, I'd be f@cked and so would millions upon millions of others.

    Nasty, isn't it ?

  6. #6

    Default

    Very nasty.

    Oh yes, I also remember reading somewhere a reason offered for the sustained high price levels; that if prices had to recede, all value in the used car market would be obliterated.

    While it sounds valid; something at the back of my mind says "pull the other one".

  7. #7
    Super Grandmaster
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    Default

    Quote Originally Posted by qDot
    While it sounds valid; something at the back of my mind says "pull the other one".
    Yeah, and in the middle of the mind "we got you by the short and curlys"

  8. #8

    Default

    If car prices drop over here, we'll just be joining the rest of the world. This is the only country i've been to where buying a new car is sometimes seen as an investment.
    Afrihost Uncapped 2mb

  9. #9

    Default

    You are right, strobe. I watch Top Gear from the UK regularily, and if your car is more than 3 years old, you are seriously poor and pay a huge amount of tax on it. Cars often loose half their value in the first few years. I read somewhere that the average vehicle in SA is 10 years old, and probably worth more than it's original price.

  10. #10

    Default

    I understand in one of the prominent eastern countries, you are not allowed to keep a car for more than 3 years, is that true, probably explains the strange cars i have been seeing on the freeways lately. They are most probably dumped in markets such as ours.

  11. #11

    Default

    How does buying/leasing cars work in South Africa? (I'm an actuary and interested in this crap.)

    In Canada and the United States, most people lease cars. Financing is usually provided by a financing company close to the manufacturer. For example, Ford's financing is usually produced by Ford Financial Services.

    Lets take an example. Chevrolet's Aveo (smallest car) has a 1.6L L4 engine on the inside. The MSRP in Canada is C$13,595 [R 67,000]. Leasing the car would cost:

    24 months, 0% financing, $0 buyout at the end: $566 / month
    24 months, 0% financing, $4,000 buyout at the end $400 / month

    36 months, 0% financing, $0 buying at the end:
    36 months, 0% financing, $4,000 buyout at the end $377 / month

    Depending how much your buyout is at the end (this is negotiated with the dealer), and how long you plan on leasing, the payments are very flexable. Keep in mind that if you don't exercise the option to buy the car at the end of the lease period, the car belong to the dealership.

    Common lease lengths include 24, 36, 48, and 60 months.

    Interest rates for GM cars and Ford are usually 0%. For imports, it can fluctuate between 0.9% to 3.9% or 4.9%. Over a 60 month period, a 3.9% interest rate is about $1,500 on a $30,000 car. Not too shabby.


    Purchase financing works pretty much the same, except there is no buyout price. The interest rates is pretty much the same.

    On our two cars, my parents paid 0% on the minivan (Oldsmobile) and 2.9% on the Toyota. They are 36-month leases, but they exercised the buyout option for both cars.

    Many people in Canada and the United States just lease, and never exercise the buyout option. They like to pay say, $300 a month, and always have the latest model car.

  12. #12

    Default

    ja my last car was a 1995 Golf CTi - bought in 2000 for 35,000 and the owner paid R35,000 for it in 1995.. not bad.. won't fall into the VW hole again though, and their new prices are just madness.
    Telkom go google go!

  13. #13
    Super Grandmaster
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    ... but none of our modern cars are sustainable for long ..

    I find it scary, that in OUR lifetime, we're gonna see the death of the car as we know it - there's no dought about that. It's only a question of when and how.

    Ah well, I won't get to get what I'm after, until the day I die.

  14. #14

    Default

    Quote Originally Posted by Jerrek
    How does buying/leasing cars work in South Africa? (I'm an actuary and interested in this crap.)...
    I speak under correction here but I think the financing models are not that much different. The price and interest levels though are something else.

    The cheapest AVEO with 1.4 L goes for R94 000.00

    I bought a Renault Clio 1.4 L in November 2001 for R104 500.00. Buy to own @ prime minus 1 over 54 months.

    I pay around R2 500 pm depending on the ruling interest rate. Fortunately for me interests rate have come down since around 18% in 2001 to 11 % in 2005.

    insurance is around R700.00

    How much can one expect to pay for insurance for that Aveo over there for there, Jerrek?

  15. #15
    Super Grandmaster
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    Default

    Quote Originally Posted by qDot
    I bought a Renault Clio 1.4 L in November 2001 for R104 500.00. Buy to own @ prime minus 1 over 54 months.
    I have a Clio 1.4 RT I got in January 2001 for R69000 - demo model, with 16000 on the clock.

    It's book value is still over R50000, over 4 years later. It still only has 40000 on the clock.

    I'll have paid it off in July this year - R92000 later ...

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