As living costs continue to rise, South Africa’s motorists are moving away from traditional vehicle ownership, opting to lease or rent long-term instead.
Speaking to 702, Sandile Ntseoane, General Manager at the Southern African Vehicle Rental and Leasing Association (SAVRALA), noted that there are plenty of alternatives to traditional car ownership.
“Over the years, we’ve seen that car ownership is no longer the automatic end goal,” he explained.
“In our high-cost environment, South Africans are rethinking whether ownership still makes sense, or whether access, flexibility, and predictable costs matter more.”
Ntseoane said that, for a long time, owning a car has been seen as a milestone, a symbol of success and independence, but that this mindset is starting to shift.
He noted that high interest rates, increasing fuel and insurance prices, and higher overall vehicle prices are forcing buyers to look at the alternatives instead.
“One of the biggest mistakes consumers make is focusing only on the monthly instalment,” Ntseoane said.
Buyers who do so fail to consider the true total monthly cost of vehicle ownership, which includes fuel, maintenance, insurance, licensing and even toll fees.
Across a car’s lifetime, owners also need to consider depreciation and resale value as part of total ownership costs.
“When you add those up, many people are surprised about how expensive car ownership actually is,” noted Ntseoane.
He explained that this is the main reason there is growing interest in ownership alternatives, including leasing, long-term rentals, and car subscriptions.
“These models don’t sell you ownership as such; they sell you predictability, which is what people want these days,” he explained.
“In your monthly cost, you don’t carry resale risk, and many of the running costs are bundled, which makes sense for an ordinary person.”
Considering the alternatives
Ntseoane went on to explain that traditional vehicle ownership makes sense for drivers who drive a lot, and plan on keeping their car for more than five years, while being able to handle unpredictable costs in the process.
He highlighted some of the alternatives available to motorists to cannot maintain this type of ownership, drive smaller distances every month, or maybe cannot secure financing.
The first of these alternatives to total ownership highlighted by Ntseoane is leasing, whether that is operating or full-maintenance leasing.
He said this option makes sense for someone who is employed full-time and has a stable income, but is looking for more predictability.
“However, it does have its restrictions, including things like limited mileage, which does affect you at the end of whatever your lease period is, as well as things like wear and tear charges,” he warned.
Another option for South Africans is car subscriptions, or long-term rentals, which Ntseoane said has been growing in popularity.
He noted that this option is best for someone whose lifestyle involves frequently changing jobs, those with low average monthly mileage needs, and those who value simplicity over ownership.
“Again, there are some things you need to be on the lookout for, for instance, higher monthly costs, the shorter contract flexibility comes at a premium,” Ntseoane said.
While these models don’t allow motorists to own the vehicle they drive, rent-to-own models allow South African motorists to take ownership of the vehicle at the end of the agreed term.
Rent-to-own allows South Africans who cannot secure credit to rent a vehicle until they can afford to buy it outright, but it also has pros and cons.
“It is ideal for young professionals and those with short-term contracts, but the con is that these tend to have a higher monthly cost than ownership,” explained Ntseoane.
“It is important for people to review the contract fine print, because at the end of the day, it does matter.”
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