Motorists are taking out longer loans for cheaper cars in South Africa

Motorists in South Africa are resorting to longer loans to buy cheaper cars to stay ahead of ever-rising vehicle prices.

This is according to WesBank, which recently noted that South African consumers are taking a more deliberate approach to vehicle financing.

This comes after the Automotive Business Council published its latest industry sales data, revealing that a total of 61,645 cars were sold in September 2026.

This represents an increase of 12.7% from September 2025, even though the last year has seen record-high petrol prices and an interest rate hike.

WesBank noted that the demand for vehicles remains resilient even as consumers face higher borrowing costs and renewed pressure from fuel and other living expenses.

While this seemingly creates a disconnect between the difficult economic landscape and higher consumer spending, the reality is that motorists are adapting their buying habits to keep up with high car prices.

The finance house said its data points to a more deliberate approach to vehicle financing.

New cars accounted for a larger share of total finance applications compared to the same month in 2025. At the same time, used vehicle loan applications also increased.

Crucially, it said that the average new vehicle finance deal was smaller than a year ago, while the average used vehicle deal was larger.

In other words, people who are still buying new cars are buying cheaper models, while those shopping in the pre-owned space are looking at better options.

People buying new cars are also taking out longer loans, reducing their monthly payments to fit their budgets, even if they ultimately pay more in the long term due to the interest owed.

“Contract terms have also lengthened, particularly for new vehicles, while a greater proportion of customers opted for fixed-rate finance, providing greater certainty around monthly repayments as interest rates change,” WesBank said.

“The application trends suggest that customers are not simply stepping away from the market in response to affordability pressures; they are adjusting how they structure their vehicle purchases,” said Thanda Sithole, Senior Economist: FNB and WesBank. 

“For consumers, the focus is increasingly on managing the total cost of ownership and finding a finance structure that provides greater certainty over the life of the agreement.”

The cost of running a vehicle is another consideration for motorists on a tight budget. Headline inflation increased to 4.4% in August from 4.3% in July.

Petrol prices are set to climb past R30 per litre for the first time this October, raising the cost of transport and other goods and services.

“As fuel and running costs become an increasingly important part of the vehicle-buying decision, consumers are looking beyond the monthly instalment to understand the broader cost of ownership,” said Sithole.

“The instalment, insurance, maintenance and fuel costs all need to be considered when determining what is genuinely affordable.”

“With the latest repo rate increase still to feed through to repayments, the next few months will provide an important indication of how consumers continue to adapt.”