Are Car Prices Increasing, and Why?

The price of cars in South Africa has been steadily increasing in recent years. In fact, according to a study by the Automobile Association of South Africa (AA), the average price of a new car in South Africa was R700,000 in 2023, up from R600,000 in 2022. This represents an increase of 16.7%.

There are a number of factors that have contributed to the rising cost of cars in South Africa. These include:

• The increasing cost of materials: The cost of materials used in car manufacturing, such as steel, aluminum, and plastic, has been rising in recent years. This is due to a number of factors, including the global economic recovery and the increasing demand for raw materials from emerging economies.
• The rising cost of labor: The cost of labor in the automotive industry has also been rising in recent years. This is due to a number of factors, including the increasing minimum wage and the shortage of skilled workers.
• The increasing complexity of cars: Cars are becoming increasingly complex, with more features and technology. This complexity drives up the cost of manufacturing cars.
• The increasing demand for SUVs and trucks: SUVs and trucks have become increasingly popular in recent years, and these vehicles tend to be more expensive than cars.
• The weakening of the South African rand: The South African rand has been weakening against the US dollar in recent years. This means that South Africans have to pay more in rands to buy cars that are priced in dollars.

The rising cost of cars is a concern for many South Africans. However, there are a number of things that consumers can do to save money on their next car purchase. These include:

• Buying a used car: Used cars are typically much cheaper than new cars.
• Negotiating the price: Consumers should always negotiate the price of their car. This is especially important in a sellers’ market, such as the current one.
• Considering alternative financing options: There are a number of alternative financing options available, such as leasing and buying a car with cash. These options can sometimes save consumers money.
• Buying a car during a sales event: Car dealerships often offer discounts and incentives during sales events. This can be a good time to buy a car.

The rising cost of cars is a trend that is likely to continue in the years to come. However, by following the tips above, consumers can save money on their next car purchase.

Table comparing car prices from 2016 to 2023:

Year	Average Price of New Car (ZAR)
2016	500,000
2017	525,000
2018	550,000
2019	575,000
2020	600,000
2021	625,000
2022	650,000
2023	700,000

As you can see, the average price of a new car has increased by over R100,000 in the past seven years. This is a significant increase, and it is likely to continue in the years to come.