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Big Increase Noted In Second Hand Vehicle Registration

Big Increase Noted In Second Hand Vehicle Registration
Toyota Prius, a hybrid vehicle, is becoming a popular vehicle amongst those buying reconditioned/second hand vehicles.
August 29
08:23 2015

A 41.6 per cent increase was noticed in second-hand vehicle registration in the first seven months of this year.

New vehicles registered increased by 5.9 per cent in the first seven months of the year.

This has been highlighted in the Reserve Bank of Fiji’s August Economic Review.

Data on vehicle sales and registration are very useful as an indicator for consumer demand, specifically high-end consumer spending.

Vehicle sales are an indicator of high-end consumer spending in an economy.

It is often the case that as income levels increase the number of vehicles sold also increases, with all other variables held constant.

In absence of vehicle sales data, vehicle registration can be used to proxy such consumer spending as all vehicles (both brand new and second-hand imported vehicles) need to be registered with the Land Transport Authority (LTA).

The Reserve Bank says the increase in vehicle registration implies that more people are purchasing vehicles and registering them accordingly.

 

Reason for increase

The central bank said a reason for increase in vehicle sales could be the low interest rate environment, in particular the availability of car loans at reduced interest rates and even zero deposit on new car loans offered by lending institutions.

This coupled with the reduction in new vehicle duties (announced in the 2011 and the 2012 National Budgets) have driven this increase in vehicle sales and registration.

In addition, the reduction in personal income tax rates in 2012, increase in civil servant wages in 2014, record levels of inward remittances, coupled with other initiatives such as the free education scheme have raised people’s disposable incomes.

It in turn allows them to spend more on high-end items, such as motor vehicles.

Feedback: rachnal@fijisun.com.fj

 

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