"The loss of confidence by investors, and the sovereign ratings downgrades by ratings agencies Fitch and S&P, have led to the rand slipping heavily against the US dollar, down from around R12.35 at the beginning of the month to its current position of around R13.40," the AA said in their mid-month forecast.The association says that the rand's decrease in value contributed to three-quarters of the expected increase. In the past week, however, the rand has increased in value, which is good news for consumers if the trend continues.
"For the short-term insurance industry in particular, this means that the cost of motor parts, which are mostly imported, will increase exponentially, which is likely to lead to increased repair costs followed by increased premiums for policyholders," Chief Executive of the South African Insurance Association Viviene Pearson said in a statement.
"The TransUnion SA Vehicle Pricing Index (VPI) for new and used vehicle pricing increased to 8.8% and 3.7% in Q1 2017, from 6.6% and 2.2% in Q1 2016 respectively," the report says. "Consumers in the new buying cycle will be under severe strain as their disposable income decreases," TransUnion says.Hopefully, things can turn around in the next few months… Whatsapp 076 888 4931.