South Africa’s resurgent new car market is being sustained by younger buyers, who are showing more intent than previous generations when making buying decisions.
This is according to the credit reporting agency TransUnion, whose third-quarter Consumer Pulse Survey showed a modest easing in purchase intent, despite younger buyers remaining more likely to buy.
“Purchase behaviour remains sharply segmented across both age and income groups,” indicated TransUnion’s survey.
“Younger consumers continue to lead intent, with 21% of Gen Z and 19% of Millennials planning to buy a vehicle in the next three months, compared to 13% of Gen X and 8% of Baby Boomers.”
It must be noted that this intent is directly linked to income, with high-income households showing the strongest intent at 34%, while middle- and lower-income consumers remain more cautious.
TransUnion’s findings reveal that while inflation and affordability remain top concerns, many consumers are optimistic, but are also adopting protective behaviours, especially in credit usage and cybersecurity.
“South Africans are signalling confidence, but it’s a confidence shaped by awareness of risk,” said Ayesha Hatea, director of research and consulting at TransUnion.
“Consumers are balancing optimism with caution, adjusting spending habits, making informed credit decisions, and staying vigilant to fraud.”
TransUnion noted that 68% of South Africans are optimistic about their household finances over the next year, while 75% expect their income to increase during that period.
Generational differences are also evident in financial behaviours, as nearly half of Gen Z and Millennials, aged 18 to 28 and 29 to 44, respectively, reported that they would apply for new credit or refinance existing credit in the next year.
Gen X and Baby Boomers, who are between 45 and 60, and 61 and 79, respectively, showed much lower intent on applying for credit.
Younger car buyers carefully leverage credit
TransUnion’s data shows that younger consumers are driving the adoption of buy now, pay later (BNPL) schemes, including for larger purchases like cars.
A vast majority (93%) of South Africans said that access to credit and lending products is important to achieve financial goals, but only 38% told TransUnion that they would be applying for or refinancing credit in the next year.
The study revealed that South Africans are increasingly aware of how credit affects them daily.
Among the respondents planning to apply for credit, 18% said that they would apply for secured credit for car loans or leases in the next year.
Around the same time TransUnion published its findings, Standard Bank published the inaugural Youth Barometer Report, which explores how South Africans aged 18 to 35 are managing their finances.
“Our research shows a generation navigating some of the highest costs of living, debt exposure, and economic uncertainty in recent memory. said Tshiamo Molanda, Head of Youth and Mass Market Segments at Standard Bank.
“Yet, even under pressure, young people are making intentional, informed choices in how they spend, borrow and save.”
Standard Bank’s Youth Barometer highlighted that young buyers in South Africa are not being reckless and thinking short-term, and are instead conscious of their limits, and thinking pragmatically.
Molanda noted that saving for a new home and budgeting for car purchases are two key points young buyers have on their minds.
She also explained that reliable transport often means affordable second-hand options rather than expensive new car purchases.
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