As of 15 April 2024, data indicates a marked preference for private vehicles among young South Africans aged 35 and below. This trend is supported by recent figures from WesBank, which reveal a significant rise in vehicle finance applications from Millennials and Gen-Zs over the past three years.
Starting in 2021, the finance applications for both new and pre-owned cars from this demographic stood at 722,505. The following year saw an increase to 806,458, and by 2023, the applications rose further to 826,088.
Lebo Gaoaketse, Head of Marketing and Communication at WesBank, pointed out that these numbers challenge the earlier industry predictions. Experts had anticipated a decline in private car ownership among younger generations, expecting them to favor alternative transportation modes like e-hailing services. “Despite a decrease in vehicle purchases by young consumers noted by Lightstone—a data analytics firm—which observed an eight percent annual reduction from 2012 to 2022, the desire for personal vehicles remains strong,” said Gaoaketse.
This apparent contradiction is explained by broader economic challenges rather than a lack of interest in owning cars. The overall economic downturn and reduced purchasing power affect all age groups, not just the younger generations.
In response, car manufacturers, dealerships, and finance companies have increased their promotional efforts. They now offer various incentives such as discounts, innovative financing options, and extended loan terms to make car ownership more accessible for young buyers. Notably, WesBank has also launched a Graduate Finance program to assist new graduates without a credit history in securing vehicle finance.
Gaoaketse emphasized the importance of achieving reliable private transportation, which can often be crucial for securing employment. He also highlighted the importance of maintaining a strong credit record for financial health and better access to loans.
He advised those in the market for a vehicle to explore more cost-effective options, such as pre-owned vehicles or models from newer, budget-friendly brands that have entered the South African market.
