With the COVID-19 pandemic, the percentage of new cars sold dropped considerably. This was not only because of the lockdown restrictions themselves, but also because of the economic crises brought by the pandemic. Also, let us remember the intense damage by flood that made Toyota temporarily shut down its plant. And last but not least, car sales were also delayed due to the shortage of semiconductors.
Now, the car manufacturing market is finally seeing light at the end of the tunnel as sales of new cars have increased. However, there are specialists who consider this as a result of a pent-up demand that occurred after lockdown restrictions were over and the situation with the semiconductor shortage was restored. Meaning that this rise in the demand of new car might not have to do with the economy being improved. Another factor waving it to this increase in car sales is that interest rates for buying a car in South Africa are better than the ones at place during the COVID-19 pandemic.
There are other voices that warn the impact the rising inflation will have specially in the middle class and which might cause this rise in sales of new cars to last only for a short period. The price of oil has risen considerably and has caused other prices to go up as well, such as fuel, food, etc. We all know that if it is more expensive to buy fuel, transportation will be more expensive too, and it will impact everything else: the food you eat, the pieces of clothe you buy, the rent you pay, the tuition for your children’s schools, you name it.
Of course, with the rise of prices, you might also have to pay higher car insurance premiums. In this regard, it is a good idea to wave your options and find the insurance company and type of coverage that works the best for you. This means that not buying car insurance in order to cut down your expenses is not the way to go. What you could do instead is comparing different car insurance offers in the market. You could use a car insurance calculator, where you will be prompted to enter information about your car in order to receive different coverage options from several car insurance companies.
With this information at hand, you will be able to choose the coverage that covers the most or that covers what you actually need. Maybe you are the kind of driver who owns a car but does not use it much. In such a case, you might want to consider pay-as-you-drive coverage. This type of coverage is ideal for those people who, especially after the lockdown restrictions, started to work from home and stopped commuting. Most pay-as-you-drive coverages will need you to install a device in your car that will count the miles you drive. The less you drive, the lower car insurance premiums you will be charged.
However, if this is not your case, this type of insurance will not be any good for you. For those drivers who use their car to go to work, or even, for those for whom the car is a tool for work, a more encompassing kind of coverage would be best. A third-party coverage might keep you in the clear, but it might cause you several out-of-pocket expenses that you could avoid if you had a more comprehensive coverage.
The market of car sales has seen an increase in the sales of new cars in South Africa to levels seen before the COVID-19 pandemic strike the world. We will have to wait to determine if this means that the economy is on a recovery path, or if it is just a matter of accumulated demand.
