Buying a new car in South Africa can be expensive, especially considering the weakness of the rand against the currencies of countries which many vehicles are imported from.
For this reason, pre-owned cars are a major trade in South Africa – with many drivers choosing to buy used cars over new vehicles due to cost savings.
The increasing number of second-hand car buyers and sellers is reflected in the growth of companies such as WeBuyCars, which buys and sells thousands of second-hand vehicles across the country and has offices and showrooms in major cities. The company has also received a R1.4-billion investment from OLX, thanks to its growth potential.
The company recently launched a new warehouse in Aeroton, Johannesburg, where its founders spoke about the growth of the second-hand market.
MyBroadband spoke to WeBuyCars co-founder Dirk van der Walt about the growing demand for second-hand cars in South Africa.
Van der Walt said that the new car market in South Africa remains stagnant due to the weak exchange rate and the increasing price of new vehicles in proportion to average salaries.
“It is a general tendency that cars in South Africa are getting quite expensive,” van der Walt said.
“The value of our currency has been steadily declining over the last 15 to 20 years, and cars are getting proportionally more and more expensive. Conversely, the market for used vehicles is climbing.”
He said South African drivers will find that used vehicle prices are not staying the same, they are actually increasing – as long as the mileage is low and they are well looked-after.
“If you are the owner of an early 90s or early 2000s vehicle, there is a chance that your vehicle will be maintaining its value and you don’t even know it,” van der Walt said.
The impressive growth experienced by WeBuyCars is directly related to the growth of the second-hand car market in South Africa, with an increasing number of locals turning away from dealerships to used car marketplaces, he said.
Van der Walt added that WeBuyCars has grown by around 60% each year for the last 18 years, barring a minor exception or two during the economic recession.
2018 was also a great period for the company, with the number of cars sold per day increasing from 125 in January 2018 to over 200 in January 2019.
“We buy around 4,600 vehicles monthly at the moment, and we sell around the same number,” van der Walt said.
“Maybe a little bit more or a little bit less, but it always works out to around the same. We buy slightly more than what we sell at the moment because the business is growing aggressively.”
He said that when it comes to the makes and models of vehicles purchased by the company, their warehouse stock is essentially a reflection of the average cars on the road.
“The way you see the vehicles lined up at the robot and the traffic on the highway, that is what we buy,” he said.