Shortage of new cars due to parts delay and increased demand

Shortage of new cars due to parts delay and increased demand 

A global delay in the production of computer chips is leading to a shortage of new car models in South Africa. Major vehicle manufacturers have had to pause production while waiting for these parts, and in some cases the wait is up to four months. 

Last month Bloomberg reported that US automakers were expecting a 1.3 million shortfall in car and light-duty truck production in the US due to the chip shortage. We can expect to see a similar situation in South Africa. 

The shortage of new cars in South Africa could also be driven by increased consumer demand. In a statement released last month, Lebogang Gaoaketse, head of marketing and communication at WesBank Vehicle and Asset Finance, said that recent months have shown an increase in demand for new vehicles. Naamsa and the Automotive Business Council echo this, saying there has been a 31.8% increase in sales year-on-year.

This growth is owed to increased consumer confidence as the economy stabilises, as well as low interest rates. The used vehicle market is also strong, which is good for the overall health of all sectors of the industry.

Even with the shortage, there are thousands of cars for sale out there, one of them surely has your name on it. But before you buy a new car, there are a few things you need to know. We’re here to spill the beans – to tell you the things that dealers know that you don’t. 

Before you head off to buy a new car, take heed of our advice below:

Check out any reviews on the make and model – not only in South Africa but all over the world. Ask your friends and family what they think of the car. Certified mechanics who are not affiliated to the dealership might be able to share some valuable information.

Don’t forget that a thorough test drive is also part of your research. Test drive more than one car, drive on the highway, drive on quiet suburban roads – even take passengers along with the drive. 

In most cases, you’ll be stuck with the car you buy for quite a while, so you might as well take the time to do your research.

Decide on your budget before you get to the dealership, and don’t be seduced into those extras. We’re thinking about extras like SatNav, sunroofs, in-car entertainment, fog lights, etc. Remember, a car costs more than the monthly instalments – you need to factor in insurance, maintenance and fuel costs. Did you know that MotorHappy offers comprehensive service plans and maintenance plans? Contact our team, let us know what your budget and your needs are, and we will find the best possible deal for you.

There are a lot of online calculators where you could check your car’s depreciation rate. This can be helpful when deciding between two similarly priced cars, as you may want to choose the car with a lower rate of depreciation.

It makes no sense to negotiate the price down, but then pay more long-term. If you’re buying a car through financing, shop around for a good loan. You can either take out a finance agreement that will result in your car being paid off at the end of the term (e.g. 60 or 72 months), or you can lower your monthly instalment by opting to have a balloon payment at the end of this period. This will be an amount that you’ll still owe at the end of your financing period. You can then either sell your car to pay off this amount, or re-finance it and take out another loan, assuming you don’t have the money available to pay it off yourself.

Did you know that your car depreciates in value as soon as you drive it off the lot? If you’re cost-conscious, consider buying a good used car or demo model – that way someone else has absorbed the depreciation costs and you get to simply enjoy your car.

Did you know that we sell cars, too?

MotorHappy has over 4000 previously-loved makes and models available through our partners. All models undergo a stringent 116-point Quality Assurance Check. Added to that, we can help you find the best possible quotes for Service Plans, Maintenance Plans, Extended Warranties and Insurance – we really are your one-stop shop for everything car related.

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