Buying vs leasing a car in South Africa – The winner is clear

Vehicle leasing has been identified as one of the up-and-coming trends in the South African automotive industry for 2025.

Vehicle leasing, sometimes also called vehicle subscriptions, allows one to essentially rent a new vehicle for several years without taking ownership of it by paying a monthly fee.

The main difference between leasing and subscriptions is that the latter generally also bundles insurance and maintenance costs into the package.

Both options are similar to traditional finance in that you’re basically paying off a vehicle on a monthly basis, however, leasing and subscriptions are touted as having several benefits.

First off, they enable customers to take delivery of a new vehicle every few years without the hassle of selling their current one or getting into more debt.

Additionally, these offerings allow consumers who may not be able to qualify for traditional finance to enter the vehicle market, allowing freer mobility for these citizens and, by extension, the potential stimulation of economic growth for the country.

They generally also include an exit clause that lets customers opt out and return the vehicle at a moment’s notice should their financial circumstances change and they can no longer afford it.

Meanwhile, the biggest pro of traditional bank financing is that you’ll own the vehicle after the contract has run its course and can do with it what you please, whether that be to continue driving it for the foreseeable future, or selling it and using the proceeds to fund your next purchase, it’s up to you and you alone.

Cost breakdown

Toyota’s Kinto One is among the most popular car subscription services in South Africa.

Using the platform for our comparison, we can determine what it would realistically cost to lease a Toyota Corolla Cross Xi, one of the most popular cars in the country on both the new and used markets.

With a maximum mileage parameter of 1,500km a month and a 60-month (five-year) contract, the Corolla Cross Xi would cost R7,479 per month through Kinto One.

This sum covers service, maintenance, and licence fees, as well as insurance.

In comparison, we can use the following formula to calculate more or less what it would cost to purchase the Corolla Cross Xi through traditional bank finance:

• Car price – R414,800
• Deposit – 0%
• Payment term – 60 terms (5 years)
• Interest – 11.00%
• Balloon – No balloon payment
• Extras – No optional extras

The calculation shows that it would cost in the region of R9,114 per month to take home the Corolla Cross on a payment plan. This, however, doesn’t include service and maintenance fees, or insurance.

According to Naked Insurance, owners should budget roughly 2% of the car’s sticker price per year for unforeseen maintenance costs, which would equal about R691 per month for the Corolla Cross.

As per Hippo, insuring a Corolla Cross would cost anywhere between R475 and R878, averaging out to R677 per month.

Tallying up these expenses amounts to a monthly ownership expenditure of around R10,482 for the base Corolla Cross Xi.

Fuel wasn’t included in this comparison as it’s an expense that must be accrued on both ends.

While it may seem like you’ll be winning when only looking at the monthly cost of financing versus leasing a vehicle, it’s not as clear-cut.

Should you have gone the traditional route, you’ll still have a vehicle that is worth a decent chunk of cash after you’ve paid all your dues to the bank.

Used-car retailer getWorth estimates that a five-year-old car will have lost anywhere between 30-40% of its original value provided it’s in reasonable shape for its age.

Considering the Corolla Cross is one of the most sought-after cars in South Africa, it will likely be at the lower end of this range.

As such, we can guesstimate that, should you buy the Xi model today, it will still be worth approximately R290,000 when it’s paid off in five summers.

Meanwhile, if you had gone the subscription route, you would have saved approximately R3,000 per month over the course of 60 months, totaling R180,000 if you were to diligently put all these savings into a separate account.

However, you wouldn’t have a car to sell and would be required to take out another subscription contract to stay mobile, whereas the individual who financed their wheels could continue driving it while only paying for maintenance and insurance.

These numbers show that, despite the higher ownership cost, purchasing a vehicle outright is still one of the best long-term options for those who have the means.