MOTORING NEWS - As the South African economy continues to bite, consumers are turning to the secondhand vehicle market as an affordable option with more variety when it comes to purchasing a vehicle.

 

But the used car market can be a confusing place, especially if you're trying to determine the value of a vehicle. Despite any salesperson's best intentions, many, if not most, consumers would admit to not knowing the difference between the retail and market value of a vehicle.

 

Attie Blaauw, head of personal lines underwriting at Santam, says the current economic climate is a major factor causing a shifted emphasis on the acquisition of vehicles in the used or pre-owned market.

"There are a number of factors at play which impact the value of a vehicle. For example, the current price increases on new vehicles can increase the demand for used vehicles and even exceed the supply. This creates an evident escalation in market prices which affects a vehicle's value. Launching a new replacement model may well have a negative impact on vehicle values, but in certain cases it has also resulted in an increase in value of used vehicles.

"A vehicle valuation is based on various criteria including the make, model and year of manufacture and can factor in modifications or added accessories. Those looking to purchase a preowned or used vehicle would do well to understand how vehicles are evaluated and, more specifically, how it needs to be insured at the correct amount."

In the South African market, the retail value for all major secondhand dealerships are linked to central databases, like the Auto Dealer's Guide, where they log the prices they sell and trade cars for.