Figures released this week show that new car sales have dropped in South Africa over the last month. This is a sign that higher interest rates and stricter lending criteria are affecting consumers decisions to spend.

Vehicle sales in September were 13% lower than sales the same time last year. The sales figures having been declining over the last six months showing that fewer and fewer people are buying new cars. Yes there have been strikes in the motor industry last month which have affected supply but still even without these strikes I feel the sales figures would still be as low as they are.

What is interesting to note is that, with the new NCA (National Credit Act) consumers can now purchase new vehicles without having to pay a 10% deposit which was required before. The Act also allows for longer financing periods to be agreed upon for the new vehicle whereas in the past, one had only 54 months to pay for the new vehicle.

But now, if you were already high in debt you can not now go and buy a new vehicle and not pay a deposit on it as the bank will see that you are high in debt and will not be willing to give you further credit. So this new regulation in the NCA is aimed at those who were not previously in debt to be able to have more flexible means of purchasing new vehicles.

So the bottom line is, if you were not in high debt then go buy a car, only if you can afford the monthly repayments and fueling up the vehicle, but if you were heavily in debt then you can forget about buying another car. And judging by the declining new vehicle sales in South Africa is goes to show that a lot of people in the country are high in debt already and thus are not buying new vehicles.

Subscribe

Sign-up to receive the latest updates from TheRandToday.com direct to your mailbox

Loading ...