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South Africa’s Vehicle Market Proves Resilient as Affordability Reshapes Demand
- Passenger vehicle sales reached 114,517 units in Q1 2026, with year-on-year growth moderating to 12.6%
- Chinese brands account for more than 19% of new passenger and light commercial vehicle sales nationally
- Hybrid vehicle interest rose to 39%, reinforcing hybrids as South Africa’s primary pathway in the shift toward electrified vehicles
South Africa’s passenger vehicle market remained resilient in the first quarter of 2026, but demand is evolving. Rising affordability pressures, higher fuel costs, the growth of Chinese brands and shifting powertrain preferences are reshaping the automotive landscape.
According to TransUnion’s Q1 2026 Mobility Insights Report, passenger vehicle sales reached 114,517 units in Q1 2026, slightly higher than the 114,246 units recorded in Q4 2025. Year-on-year (YoY) growth eased to 12.6%, down from the stronger performance seen during parts of 2025, but demand remained elevated despite a more uncertain macroeconomic environment.
A Stronger Start, But Growing External Pressures
The report, which provides a first quarter overview, indicates that South Africa entered 2026 on a stronger economic footing. This was supported by easing inflation, lower interest rates over the previous year, reduced load-shedding, and improved financial conditions.
However, rising geopolitical tensions in the Middle East and the associated oil price shock have heightened downside risks. In March 2026, inflation increased from 3.1% to 4.0% in April 2026, while the Monetary Policy Committee (MPC) recently raised the prime lending rate by 25-basis points in May 2026. Combined with higher fuel and transport costs, these factors are expected to place renewed pressure on affordability and consumer spending.
“Vehicle demand has not collapsed, but the market is moving into a more selective phase,” said Ayesha Hatea, director of research and consulting at TransUnion South Africa. “Consumers are still buying vehicles, but affordability is no longer only about the purchase price. Fuel costs, financing costs, insurance, servicing, and total cost of ownership are becoming central to the decision.”
Residual Value and the True Cost of Ownership
The report found that residual values are becoming an increasingly important component of vehicle affordability. As finance terms extend beyond six years for many buyers, depreciation and resale performance play a growing role in ownership economics, giving brands that retain value more effectively a competitive advantage.
The shift towards longer financing terms and the use of balloon structures reflects a growing focus on monthly affordability and cash-flow flexibility. However, this trend also increases exposure to residual value risk. Where vehicle values underperform expectations, consumers may face refinancing pressure or negative equity at trade-in, making used vehicle market performance an increasingly critical consideration.
Chinese Brands Reshape the Competitive Landscape
One of the most notable structural shifts is the continued rise of Chinese automotive brands. Chinese car sales grew by 75% YoY in Q1 2026, significantly outpacing traditional OEM growth of 2% and the broader passenger and light commercial vehicle (LCV) market growth of 12.7%. As a result, Chinese brands accounted for more than 19% of new passenger and LCV sales nationally, meaning nearly one in five new vehicles sold in South Africa was from a Chinese manufacturer in Q1 2026.
The shift is no longer driven solely by entry-level pricing. Chinese brands are increasingly competing on technology, features, fuel efficiency, range, warranty offerings, and perceived long-term value. On a combined portfolio basis, Chery Group, including Chery, Jetour, Omoda, and Jaecoo, recorded combined sales of 16,094 units in Q1 2026, positioning itself as a top three automotive player.
“Chinese brands have moved beyond the role of price disruptors. They are becoming structural industry players, influencing dealer networks, financing ecosystems, ownership perceptions, and the wider discussion around localisation and industrial competitiveness,” said Hatea.
Diverging Trends Across New and Used Markets
The new and used vehicle markets continued to show differing trends. NaTIS data indicates that new vehicle registrations increased by 11.6% YoY in Q1 2026, marking a sixth consecutive quarter of double-digit growth. In contrast, used vehicle registrations increased by 2.6%, suggesting a modest recovery in the secondary market, although it still trails the stronger momentum seen in new vehicle sales.
The used-to-new registration ratio declined to 2.3 in Q1 2026, the lowest level recorded over the reporting period. While used vehicles still make up the majority at 69% of total registrations, the share of new vehicles has risen to 31%, up from 23% in Q4 2025. This shift has been supported by favourable pricing dynamics, with new vehicle inflation falling to 0.8%, while used vehicle prices remained in deflation at -1.3%.
Confidence Rises, But Caution Remains
Dealer sentiment also reflects the stronger demand environment. New vehicle dealer confidence increased to 67 in Q1 2026, its highest level in 13 years. However, the report cautions that increasing fuel costs, inflation risk, and rising operating expenses could create more challenging conditions in the quarters ahead.
Forward-looking consumer data remains constructive. TransUnion’s Consumer Pulse Survey found that consumers likely to purchase a vehicle in the next few months increased from 19% in Q4 2025 to 22% in Q1 2026. Short-term purchase intent is strongest amongst younger consumers, with 26% of Gen Z and 24% of Millennials indicating plans to buy.
A Gradual Shift in Powertrain Preferences
Powertrain preferences are also evolving. Internal combustion engine vehicles remain the most popular choice, preferred by 49% of consumers in Q1 2026. However, interest in hybrid electric vehicles has grown significantly to 39%, up from 30% in Q4 2025, making hybrids the leading electrified option. Interest in both battery electric vehicles and plug-in hybrids also increased, with each reaching 26%.
“Hybrids are emerging as a practical transition pathway for South African consumers. They offer fuel savings and lower running costs without full dependence on charging infrastructure, which makes them relevant in a market where affordability and operating certainty remain critical,” said Hatea.
A Market Entering Its Next Phase
While domestic demand continues to support the industry, passenger vehicle exports remain under pressure amid trade uncertainty, geopolitical disruption, protectionism, and changing decarbonisation requirements.
“The South African automotive market is not reverting to its previous structure. The next phase will be defined by affordability, value, access to finance and how effectively industry players respond to evolving consumer behaviour,” said Hatea.
Cost-Of-Living Squeeze Deepens as SA Consumers Shift into Survival Mode
South African households are entering a more constrained financial period, as the modest momentum seen at the end of 2025 comes under pressure from rising living costs.
According to TransUnion’s latest insights, increases in fuel prices, renewed food inflation, and persistently higher borrowing costs are reshaping consumer sentiment, shifting from early signs of recovery in 2026, to a more defensive posture.
This comes as the South African Reserve Bank’s Monetary Policy Committee (MPC) delivers its latest interest rate decision of a 25-basis points increase, against a backdrop of rising inflation, which increased to 4.0% in April from 3.1% in March, reflecting persistent price pressures across essential categories.
Incremental Increase Adds to Mounting Financial Pressure
Following the MPC’s decision to increase interest rates by 25 basis points, TransUnion notes that the move reinforces a financial environment where household momentum is already being challenged, and cost pressures are compounding.
“A 0.25% increase lands on households that are already under strain,” says Lee Naik, chief executive officer, TransUnion Africa. “This is not a new shock; it is an amplification of pressures that consumers are already managing. The combination of higher instalments and rising living costs accelerates the shift from cautious optimism to caution.”
Data from TransUnion’s Q4 2025 Industry Insights Report shows elevated delinquency across several credit products, while TransUnion’s Q1 2026 Consumer Pulse Study highlights increased reliance on credit and sustained reductions in spending.
“When fuel, food and borrowing costs rise together, the impact is not incremental; it is compounding. That is where we see the real pressure emerge, and where financial behaviour shifts decisively,” Naik adds.
Multiple Cost Pressures Converge
“The risk is not just higher rates; it is the combination of cost pressures hitting at once. The affordability challenge becomes immediate and more difficult to manage,” Naik adds.
TransUnion notes that the key issue is no longer the rate decision in isolation, reflecting the cumulative strain of overlapping cost pressures on household affordability.
“At the start of 2026, there was a sense that consumers were beginning to stabilise, with some early signs of recovery in repayment behaviour and financial resilience. That momentum is now being challenged,” says Naik.
“We are seeing a clear shift toward greater caution, as rising fuel and food costs begin to outweigh any incremental relief. The financial pressure facing households is no longer emerging, it is entrenched.”
Even ahead of the MPC outcome, the financial environment facing consumers has materially tightened. TransUnion’s Q1 2026 Consumer Pulse Study showed widespread behavioural adjustment, with households cutting discretionary spending, increasing reliance on credit, and drawing down savings buffers to manage rising living costs.
At the same time, household affordability is being eroded by cost escalation across essential categories. Household food basket data (PMBEJD April 2026) shows the average basket rising to R5,452.09, marking a clear re-acceleration in food inflation driven by fuel and logistics costs.
Credit performance data from TransUnion’s Q4 2025 Industry Insights Report further reflects growing strain, particularly in non-bank lending segments where delinquency remains elevated, signalling deep financial vulnerability among consumers.
“Consumers are not reacting to a single shock. They are responding to a sustained financial pressure building over time,” adds Naik. “What we are seeing now is a structural shift in behaviour, where households are increasingly prioritising essentials, protecting debt commitments and managing risk more cautiously.”
Looking Ahead: A Structurally More Cautious Consumer Cycle
TransUnion’s outlook remains clear: South African consumers are entering a more cautious financial cycle, as the momentum of 2025 is increasingly challenged by sustained and broad-based cost pressures.
“The environment has shifted from short-term stress to structural pressure,” concludes Naik. “Consumers are no longer adjusting temporarily, they are recalibrating how they manage money, prioritise spending and engage with credit in a more constrained and uncertain environment.”
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Interest Rates on Hold, but South African Consumers Remain Under Pressure
Following today’s decision by the South African Reserve Bank’s Monetary Policy Committee (MPC), the latest data from TransUnion points to a consumer environment that remains fragile, with many households continuing to navigate mounting financial pressure.
While some improvement in repayment behaviour was observed toward the end of 2025, this stability is proving short-lived. Rising living costs, increasing reliance on credit, and limited financial buffers mean that many consumers are entering 2026 in a vulnerable position, with little capacity to absorb additional economic shocks.
The decision to leave interest rates unchanged may offer a sense of short-term stability, but it does little to ease the underlying financial strain facing households.
“Stable rates do not translate into financial relief for most consumers,” says Fatgie Adams, Head of Credit Risk Solutions at TransUnion. “Many households are already under pressure, and upcoming increases in fuel and food costs are likely to erode any temporary stability created by a hold decision.”
Insights from the TransUnion Q4 2025 Consumer Pulse Study (CPS) show that households have already begun adjusting their behaviour in response to financial stress. More than half of consumers report cutting discretionary spending, while a significant portion have reduced clothing purchases, delayed major expenses, and scaled back on services such as subscriptions and digital platforms. At the same time, the study indicates a growing reliance on credit, with a notable share of consumers using credit to manage shortfalls in their monthly budgets.
This behavioural shift is reinforced by credit performance trends from the TransUnion Q4 2025 Industry Insights Report (IIR), which highlights continued strain in key segments. Credit card delinquency remains elevated at 17.4% (balance-level), while non-bank personal loan delinquency is critically high at 53.4% (consumer-level). These figures highlight deep vulnerability among financially stretched consumers, with short-term credit products showing the most acute distress. Although home loan delinquency remains relatively stable at 7.5%, it is still elevated, pointing to persistent pressure even within more structured credit product.
“Consumers may appear stable on the surface, but in reality, many are already in a form of financial triage,” Adams adds. “A flat rate environment simply provides time to prepare, it does not remove the pressure.”
With fuel prices expected to rise sharply in the coming months and food costs remaining persistently high, the overall cost of living is likely to increase further, placing additional strain on already stretched household budgets.
Regardless of the outcome, the broader picture remains one of rising pressure on household finances. The combination of higher living costs, constrained income growth and existing debt obligations means that many consumers will need to navigate the months ahead with increased caution.
Maintaining a clear view of essential expenses, staying on top of repayments, and making considered financial decisions will be critical as cost pressures continue to build.
SA’s Consumer Credit Market Shifted from Recovery to a More Stable Position in Q4 2025
- Vehicle asset finance closed out a strong year of growth, with Q4 2025 showing improved demand and stronger originations amid softer new vehicle pricing, with better repayment performance
- Bank personal loans showed continued growth with improved repayment behaviour, while non-bank lenders maintained high growth on smaller value loans while seeing greater repayment pressure
- Retail and revolving accounts saw softer demand as consumers opted for smaller purchases and Buy Now, Pay Later options at point of sale
TransUnion’s Q4 2025 South Africa Industry Insights Report shows the consumer credit market shifting from a tentative recovery to broader stabilisation driven by steady inflation and interest rates, as well as improvements in consumers’ repayment behaviour. During the quarter there was again notable growth in vehicle asset finance and the personal loans market, while retail credit saw a change in product preference with consumers making smaller purchases.
South Africa's vehicle finance market continued its expansion in Q4 2025, with a fifth consecutive quarter of sustained growth. The growth in total loan balances continued to outpace new account volumes, indicating a firmer continued recovery in demand supported by a more accommodative interest rate environment following a 25 basis point (bps) repo rate cut in November, which further improved household affordability. Origination volumes rose 9.9% year-over-year (YoY), supported by strong consumer interest in affordable new car models and sustained lender confidence. The average new loan amount also climbed, by 3.3% YoY.
Much of this growth was driven by younger consumers, with Gen Z and Millennials[1] accounting for 66% of all originations. Lenders demonstrated an increased risk appetite, with originations to riskier below-prime borrowers growing by 20.2% YoY. This expansion coincided with positive repayment performance, as account-level delinquencies (the percentage of accounts three or more months in arrears) declining by 59 bps YoY to 6.8%.
The market dynamics were further shaped by a significant shift in the used-to-new vehicle financing ratio, which declined to 0.96 used vehicles for every new one financed, down from 1.56 in Q4 2024. This shift towards more new vehicle financing reflects the availability of budget-friendly new models and favourable inflation trends.
More consumers chose longer loan terms to improve monthly affordability too: in Q4 2025, 56.4% of consumers chose a loan term of 72 months or more, compared to 51.9% who made the same choice one year prior. This marked the first quarter this decade that more than half of consumers chose the longest vehicle finance term available.
“The change in the used‑to‑new finance ratio indicates stronger momentum in new‑vehicle financing and can also be attributed to shifting consumer preferences,” said Ayesha Hatea, director of research and consulting at TransUnion South Africa. “With advancements in technology, new vehicles often offer more features, safety upgrades, and improved fuel efficiency compared to older models, along with longer and more comprehensive warranties.”
“The data on longer loan terms highlights how consumers are adjusting their spending patterns and making strategic financial decisions. By opting for longer loan terms, many are able to manage their monthly payments more effectively and potentially afford a newer or higher-priced vehicle,” she added.
Diverging Strategies Shaped Personal Loan Market
The personal loan market showed a distinct divergence in Q4 2025 as bank and non-bank lenders pursued contrasting growth strategies. Bank personal loan originations grew by 10.2% YoY with average new account amounts up by 10.7% YoY, extending larger loan amounts to lower-risk consumer cohorts. This disciplined approach yielded better repayment performance as account-level delinquencies for bank loans dropped by 271 bps YoY to 27.0%.
Conversely, non‑bank lenders grew their portfolios quickly by shifting toward smaller loans, with average new account amounts down 2.8% YoY and the total volume of originations up 14.7% YoY. Younger borrowers drove a significant portion of this growth, with the volume of new loans issued to Gen Z borrowers climbing 39.6%. However, in contrast to bank lenders, which target relatively better risk borrowers, non-bank lenders’ customer bases are heavily skewed toward the riskiest subprime[2] consumers. As a result of this exposure, account-level delinquencies for non-bank loans remained elevated at 48.0%.
“These trends highlight a clear market split. Banks successfully managed risk while expanding their active books through larger loans to lower-risk borrowers. Meanwhile, non-bank lenders extended credit access to higher-risk borrowers through smaller loans, but faced notable repayment strain,” said Hatea.
Retail Credit Adapted as Buy Now Pay Later Gained Traction
The retail credit sector showed signs of a strategic shift in Q4 2025, influenced by changing consumer behaviours and the growing adoption of Buy Now, Pay Later (BNPL) solutions. While the clothing account sector showed resilience account originations growing by 7.2% YoY, other areas of retail credit saw a decline in new account openings. Retail instalment origination volumes decreased 19.4% YoY, and revolving credit originations fell 16.6% YoY.
This downturn in traditional retail credit originations could be influenced by increasing popularity of BNPL solutions in the market. TransUnion’s Q4 2025 Consumer Pulse Study shows 57% of South African respondents hold a BNPL product, and 36% have used a BNPL product multiple times in the last 12 months to pay for goods and services.
“Consumers appear to be choosing these flexible payment options for smaller credit purchases, drawn to their fixed or interest-free instalment plans,” said Hatea. “However, this trend has not yet significantly affected clothing accounts, which benefit from strong consumer loyalty and accessibility.”
Despite fewer new accounts in some retail segments, possibly also influenced by tighter lending policies, portfolio health shows positive signs. Account-level delinquencies for clothing accounts fell 213 bps YoY to 24.5% and retail revolving delinquencies dropped 238 bps YoY to 17.6%. Lenders also adapted their strategies: the average clothing account limits went up 6.8% YoY, while the average limit for revolving accounts also grew, by 3.9% YoY. This suggests a focus on providing more credit to existing, credit-healthy customers while managing the influx of new, potentially riskier borrowers.
Table 1: Key South African Consumer Credit Market Metrics (Q4 2025 vs Q4 2024)
|
Product |
YoY origination growth |
Serious account-level delinquency rate* |
YoY basis points (bps) change in delinquency rate |
| Credit card |
8.0% |
12.9% |
+33 bps |
| Bank personal loan |
10.2% |
27.0% |
-271 bps |
| Non-bank personal loan |
14.7% |
48.0% |
+50 bps |
| Clothing accounts |
7.2% |
24.5% |
-213 bps |
| Retail instalment |
-19.4% |
26.8% |
-110 bps |
| Retail revolving |
-16.6% |
17.6% |
-238 bps |
| Home loans |
8.5% |
7.5% |
+11 bps |
| Vehicle finance |
9.9% |
6.8% |
-59 bps |
*Account-level serious delinquency rate, measured as a percentage of accounts three or more months in arrears
“In Q4 2025, lenders widened access to credit where consumers showed stronger repayment discipline, tightening where risk accumulated and reshaping their portfolios towards lower risk borrowers,” Hatea said. “The data suggests that lenders’ priorities are shifting from stabilisation towards sustainable momentum as they pair cautious growth with sharper exposure discipline, deeper affordability insights and refined product strategies.”
[1] TransUnion age distribution: Gen Z (Born 1995 – 2010); Millennials (Born 1980-1994); Gen X (Born 1965-1979); Baby Boomers (Born 1946-1964)
[2] Scores are based on TransUnion’s CreditVision® generic scoring methodology. Risk distribution key: subprime (0-625), near prime (626-655), prime (656-695), prime plus (696-720), super prime (721-999).
Affordability Drives South Africa’s Strongest New Car Sales in Over a Decade
- Passenger car sales reached 114,246 in Q4 2025 (up 15.3% year over year), bringing the full-year total to 422,103 – the highest since 2014
- Chinese brands now account for over 17% of total sales, signalling a structural shift in consumer buying behaviour
- Younger buyers and affordability-led demand continue to drive momentum as high-income demand normalises
South Africa’s automotive market closed 2025 at its strongest level in more than a decade, supported by easing interest rates, improving vehicle pricing, and a decisive shift in how consumers evaluate vehicle affordability. While headline sales reflect a clear recovery, underlying patterns reveal a market increasingly shaped by value, sharper segmentation and intensifying competition.
According to the TransUnion South Africa Q4 2025 Mobility Insights Report, new passenger vehicle sales reached 422,103 units in 2025, representing 20.1% year-on-year growth. Momentum remained firm into the final quarter, with 114,246 vehicles sold in Q4, making it the strongest quarterly performance based on volume of the post-pandemic period.
“This recovery is real, but it is far from uniform,” says Ayesha Hatea, Senior Director of Research and Consulting at TransUnion Africa. “What we’re seeing is not a return to old buying patterns, but a more deliberate, affordability-driven market where consumers are weighing value, monthly repayments and long-term ownership costs far more carefully.”
Value Brands Cement a Structural Shift
One of the standout trends of 2025 has been the continued rise of Chinese manufacturers. These Chinese brands expanded at nearly nine times the pace of the overall market, lifting their share to more than 17% of total new passenger vehicle sales, up from less than 5% just four years ago.
Aggressive pricing of enhanced specifications, extended warranties and growing consumer trust have fuelled intensifying competitive pressure across all segments of the market.
“This is no longer a short-term disruption,” Hatea explains. “Value brands are now firmly embedded in South Africa’s automotive ecosystem, and their success highlights how decisively affordability and perceived value are influencing purchasing decisions.”
New Vehicles Regain Ground as Pricing Gaps Narrow
Improved affordability conditions shifted demand back toward new vehicles in Q4. New vehicle registrations rose 30.1% year-on-year, compared with just 0.7% growth in used vehicle registrations, narrowing the gap between the two segments. The used-to-new ratio declined to 2.9, down from approximately 3.8 in 2024.
This shift was supported by record-low new vehicle inflation of 1.2%, alongside 1.9% deflation in used vehicle prices, making monthly repayments on new vehicles increasingly competitive.
These trends align with a broader macroeconomic environment focused on easing pressure on household finances, as reinforced in South Africa’s 2026 National Budget delivered by Finance Minister Enoch Godongwana, which emphasised fiscal stability and moderating inflation. Against this backdrop, TransUnion’s data shows vehicle demand remains highly sensitive to interest rates, fuel costs and financing conditions.
“When repayment gaps narrow, buyer behaviour changes quickly,” says Hatea. “But affordability remains the single most powerful lever in sustaining demand.”
Younger Buyers Drive Momentum as Premium Demand Cools
Consumer sentiment showed modest improvement in Q4, with the share of consumers planning to buy a vehicle in the next three months rising from 17% in Q3 to 19% in Q4, according to the TransUnion Consumer Pulse Survey.
That improvement was driven primarily by younger consumers. Gen Z (ages 18-29) purchase intent increased to 25%, while Millennials (ages 30-45) rose to 21%, compared to 14% for Gen X (ages 46-61) and 7% for Baby Boomers (ages 62-80), underscoring a clear generational divide in demand.
At the same time, demand among high-income households has begun to normalise. While consumers in the highest income segment continued to show the strongest purchase intent at 20%, this marked a notable decline from 34% in Q3, indicating a cooling in premium-led purchasing.
“The centre of gravity is shifting,” Hatea notes. “Growth is increasingly coming from younger, more price-sensitive buyers rather than the top end of the market.”
Electrification Advances, on Practical Terms
Electrified mobility continued to gain traction in 2025, with new energy vehicle (NEV) sales reaching approximately 16,700 units, representing 4% of new passenger vehicle sales, up from just 0.3% in 2021.
Growth remains firmly hybrid-led, with traditional hybrids representing nearly three-quarters of NEV sales, reflecting consumer preference for lower upfront costs and limited reliance on charging infrastructure. Battery-electric vehicles remain concentrated among higher-income buyers.
“South Africa’s electrification journey is progressing, but it is pragmatic rather than aggressive,” says Hatea. “Hybrids are bridging the gap between affordability and sustainability.”
A Market Rebalanced, Not Recovered
As the industry looks ahead to 2026, TransUnion’s data suggests a market that has stabilised but remains finely balanced. “The next phase of growth will be incremental and affordability-driven,” Hatea concludes. “Manufacturers, dealers and financiers that align closely with how South Africans are actually buying, not how they bought a decade ago will be best positioned to compete.”
Read the full Q4 2025 TransUnion South Africa Mobility Insights Report here.
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South Africa’s Lenders Adopted Prudent Risk Strategies to Drive Growth in Q4 2024
- Card issuers rewarded performing existing cardholders with credit limit increases, but offered lower credit limits to new cardholders
- Consumers increasingly turned to non-bank lenders for personal loans
- Vehicle loan originations increased for the second consecutive quarter, indicating optimism for the sector
According to TransUnion’s (NYSE:TRU) Q4 2024 South Africa Industry Insights Report, the country’s credit card issuers have adapted their acquisition strategies to enable prudent growth, while effective risk management has led to a decline in account-level delinquencies. During Q4 2024, credit card issuers reduced the average credit card limit on new accounts by 3.9% year-over-year (YoY), while at the same time they increased credit limits on existing credit cards[1] by 5.0%.
The limit increase observations were prominent among prime plus consumers (+4.1% average credit limit increase) and super prime[2] consumers (+1.8%). As a result of higher line access and consumers continuing to leverage credit cards to meet financial and transactional needs, total outstanding balances rose by 7.8% YoY. These insights are echoed in TransUnion South Africa’s Q4 2024 Consumer Pulse Report, where 13% of consumers responded that they had increased their usage of available credit.
An improving performance picture, as observed since Q2 2022, continued as delinquencies (measured as accounts 90 days or more past due) decreased by 34 basis points (bps) YoY during Q4 2024. This trend shows that South African consumers have been able to maintain their credit card payment obligations, while leveraging their cards to navigate the continued high cost of living that has put pressure on disposable income.
“Lenders who are sustaining growth and profitability are drawing on enhanced risk attributes to stimulate a greater share of spend and wallet by identifying consumers who are likely to use credit lines judiciously,” said Lee Naik, CEO of TransUnion Africa. “At a time when new account acquisition is costly, enabling lower-risk consumers to re-engage with their inactive cards, or to extend the use of existing cards, will encourage prudent growth and enable customer loyalty.”
Personal loan lenders target younger borrowers
While personal loan originations from traditional banks declined by 6.2% YoY in Q4 2024, personal loan originations from non-bank lenders increased by 13.9% YoY. Non-bank personal loan originations among Gen Z[3] consumers grew by 48.5% YoY, with this cohort accounting for 15.5% of all non-bank originations.
Non-bank personal loan originations increased YoY across all risk tiers (except for the super prime risk tier, where originations declined by a marginal 1.0% YoY), with the greatest increase seen among prime borrowers (16.1%). However, bank personal loans declined across all risk tiers YoY, except for subprime, where they increased by 6.0% YoY.
Banks are expanding their personal loan offerings to a greater proportion of subprime borrowers. Among bank personal loans, the share of subprime borrowers increased from 53% in Q4 2023 to 58% in Q4 2024, with the share of near prime borrowers remaining consistent across the year. There were minimal YoY fluctuations across the remaining risk tiers. In contrast, the distribution across risk tiers for non-bank personal loans remained consistent over the last two quarters of 2024.
The personal loans market continues to be dominated by younger borrowers, although the total share of originations by borrowers aged 45 and younger did decline marginally in 2024. Seventy-five percent of bank personal loans were granted to Gen X and Millennial customers during Q4 2024, down from 78% one year prior, while 70% of non-bank personal loans were granted to the same age group in Q4 2024, compared to 72% one year prior. At the same time, both lender types are growing their portfolio among the youngest Gen Z borrower group, with 19% of bank personal loans going to Gen Z borrowers in Q4 2024, up from 16% one year prior, and 16% of non-bank personal loans going to these consumers in Q4 2024, up from 12% one year prior.
With respect to credit performance, bank personal loan account-level delinquencies at 90+ days past due dropped by eight bps YoY to 26.6%, while non-bank personal loan delinquencies increased by 452 bps to 40.6%.
“Non-bank personal lenders have a more tolerant risk appetite than banks, and they are responding positively to market demand across age groups and risk tiers,” says Naik. “Lenders that maintain rigorous risk assessment practices that enable greater and earlier prediction of risk, offer education on how to use and manage credit, and empower younger consumers to build their credit profiles, will ensure the continued sustainability of the personal loan market.”
Vehicle loan market continued its recovery path
The vehicle loans market showed encouraging signs of continued growth, as origination volumes increased by 9.6% YoY, and average new loan amounts grew by 1.4%. The greatest growth in originations was observed among Gen Z consumers, where originations grew by 27.9%, although their share of total new finance agreements remains relatively low compared to older age groups. This is the second consecutive quarter in which total vehicle loan originations grew YoY, with the last increase in origination volumes before these two increases having been in Q3 2022. Given the 0.25 bps decrease in interest rates as of November 2024 and a positive outlook for consumer confidence, the vehicle loan market is expected to continue this recovery trend.
These positive trends were also evident in the Q4 2024 TransUnion South Africa Vehicle Pricing Index, that revealed a growing share of financed vehicles within the R250,000 to R750,000 price range. This shift suggests that, while affordability may still be a concern, consumers are prioritising flexible financing solutions and adjusting their purchasing behaviour to align with available credit and economic conditions.
“While the two recent interest rate decreases were just 25 basis points each, the significant increase in new vehicle loan originations indicates that South Africans are becoming more optimistic about their financial futures,” says Naik. “While vehicle ownership is aspirational for many individuals, it’s also the key to unlocking growth for entrepreneurs, and the owners of micro and small enterprises, all of whom are the engines of economic growth in South Africa.
“As part of our drive to expand financial inclusion, TransUnion has included a wide range of alternative data into our scoring solutions, so that more South Africans are more visible in our risk scoring models, in turn creating the platform for them to access finance for the first time.”
Table 1: Key South African Credit Market Metrics (Q4 2024 vs Q4 2023)
|
Product |
YoY origination growth |
Serious account-level delinquency rate* |
YoY basis points (bps) change in delinquency rate |
| Credit card |
5.6% |
12.0% |
-33 bps |
| Bank personal loan |
-6.2% |
26.6% |
-8 bps |
| Non-bank personal loan |
13.9% |
40.6% |
452 bps |
| Clothing accounts |
-4.0% |
26.4% |
-143 bps |
| Retail instalment |
14.9% |
27.5% |
-204 bps |
| Retail revolving |
11.9% |
14.5% |
-500 bps |
| Home loans |
-13.2% |
7.1% |
26 bps |
| Vehicle finance |
9.6%% |
4.8% |
13 bps |
*Account-level serious delinquency rate, measured as a percentage of accounts three or more months in arrears
- [1] Credit card accounts that are currently open and active in the portfolio.
- [2] Scores are based on TransUnion’s CreditVision® generic scoring methodology. Risk distribution key: subprime (0-625), near prime (626-655), prime (656-695), prime plus (696-720), super prime (721-999).
- [3] TransUnion age distribution: Gen Z (Born 1995 – 2010); Millennials (Born 1980-1994); Gen X (Born 1965-1979); Baby Boomers (Born 1946-1964
South Africa’s Auto Sector Sees Strong Growth Amid Evolving Consumer and Insurance Trends
- New passenger car sales hit multi-year highs, totalling 102,268 units in Q1 2025
- Younger buyers and budget-conscious consumers reshape the financing and brand landscape
- South Africa’s younger car buyers are turning to TikTok, Instagram, and YouTube, reshaping the automotive marketing playbook
- New insights on insurance trends highlight growing risk of uninsured vehicles
The latest TransUnion South Africa Mobility Insights Report (formerly the Vehicle Pricing Index) for Q1 2025 highlights a strong rebound in the country’s automotive market. This recovery has been driven by improved consumer sentiment, declining interest rates, access to retirement savings through two-pot withdrawals, and rising real wages. According to naamsa data, new passenger vehicle sales continued their upward trajectory in the first quarter, with monthly volumes averaging over 34,000 units, the highest levels seen since Q3 2015.
Affordability remains a key driver of vehicle purchasing and financing decisions. Creative financing options, longer ownership cycles, and the growing availability of value-oriented models are significantly reshaping consumer behaviour, particularly among younger and first-time buyers. The Q1 2025 TransUnion South Africa Mobility Insights report highlights that several emerging brands offering competitively priced vehicles have recorded strong year-over-year growth, contributing to the overall surge in new vehicle sales.
“South African consumers are returning to the vehicle market with a clear focus on value and flexibility,” says Lee Naik, CEO TransUnion Africa. “We’re seeing a continued shift away from traditional premium segments in favour of more accessible alternatives that meet evolving needs and budgets.”
Insurance Trends Reveal Shifting Landscape and Rising Risk
The Q1 2025 report introduces new data on insurance-linked vehicle asset finance (VAF). As of early 2025, only 39% of insured vehicle owners had financed vehicles, down from 44% in 2020. This signals a rise in alternative financing or lapses in insurance post-purchase, especially concerning as TransUnion’s 2024 Insurance Survey found that 25% of vehicle users had driven uninsured in the past six months.
This trend has implications for lenders, who face greater asset risk in the event of write-offs without insurance recovery, and for insurers, whose portfolios may now carry increased exposure. To mitigate these risks, strategies such as bundled insurance, usage-based coverage and low-cost flexible insurance models are growing in relevance.
Used Vehicle Momentum Slows as New Sales Lead Recovery
While used vehicles have dominated financing trends in recent years, Q1 2025 marked a notable shift back toward new vehicle purchases, driven by easing interest rates, improved entry-level model availability, and aggressive manufacturer incentives. Notably, the influx of competitively priced Chinese models has attracted budget-conscious buyers away from the used market, fuelling fresh growth in new vehicle registrations.
“Consumers are holding onto their cars for an average of six to eight years, compared to the previous five years, a trend that reflects affordability constraints and a more cautious approach to ownership,” says Naik.
Affordability and Flexibility Drive Change
The report reveals that shifting consumer preferences are reshaping the competitive landscape, with some established manufacturers experiencing year-over-year sales declines while more affordable and value-driven entrants continue to gain market share.
“The definition of value is changing,” says Naik. “It’s no longer just about the price tag, it’s about financing flexibility, long-term ownership costs, and trust in the product. That’s what’s driving consumer decisions today.”
Social Media's Growing Influence on South African Car Buyers
Generation Z’s1 rising influence, with a 27.9% year-on-year increase in vehicle finance volumes, highlights why social media has become essential for automotive brands aiming to attract younger buyers. As South Africans spend over 3.5 hours daily on platforms like TikTok, Instagram, and YouTube, 76% of users now turn to social media for product research, pushing automotive brands toward digital-first strategies with influencer campaigns, short-form videos, and interactive content, yet South Africa’s low social media ad spend signals a major untapped growth opportunity for marketers.
Social platforms are reshaping how South African consumers research, engage with, and purchase vehicles, particularly among Gen Z and Millennials1 who expect personalised, digital-first experiences. To stay competitive, brands are adopting influencer collaborations, platform-specific strategies, AI-enabled targeting, and immersive tools like augmented reality and virtual reality. Social commerce is gaining ground as buyers look for seamless, in-app journeys from browsing to booking.
Economic Outlook: Growth with Caution
The broader economic outlook for South Africa in 2025 remains cautiously optimistic, with GDP expected to grow by 1.4%, driven primarily by household consumption. While industrial output remains under pressure, consumer-driven sectors, particularly retail and vehicle sales, continue to show resilience. Vehicle export activity rose modestly by 0.4% year-over-year in Q1 2025, signalling a gradual recovery following the sharp decline in the previous quarter.
“The strong recovery in new vehicle sales is a positive sign,” says Naik. “But sustaining this growth will require policy certainty, infrastructure investment, and structural reforms. Without these, the economy remains vulnerable.”
“The South African automotive sector is adapting to new consumer behaviours and market forces. The insurance gap, affordability options, credit access and rising Gen Z1 participation will shape the road ahead. Collaboration across industry players is vital for long-term growth,” concludes Naik.
Read the full TransUnion South Africa Mobility Insights Report here.
1 Generation X (Gen X): Born 1965–1980; Millennials (Gen Y): Born 1981–1996; Gen Z (Generation Z) Born 1997–2012
ENDS
Notes to Editors: To provide you with timely market insights, we are updating our reporting structure.
Starting this quarter, the Vehicle Pricing Index will be renamed the TransUnion South Africa Mobility Insights Report, reflecting our broader focus on mobility trends. Vehicle Finance data will now be included in the TransUnion South Africa Industry Insights Report (IIR).
South Africans Signal Cautious Confidence as Financial Habits Evolve
- TransUnion’s Q2 2025 Consumer Pulse Study reveals strategic shifts in saving, borrowing, and fraud defence, with younger generations leading the way
- 75% of South Africans expect their income to rise, but nearly 39% anticipate missing at least one bill or loan payment
- 45% of Gen Z and 39% of Millennials plan to apply for credit, leading a shift toward more proactive financial habits
- 58% of consumers were targeted by fraud in Q2, with many responding by strengthening their digital security
South African consumers are responding to ongoing financial pressures with increasing intent and vigilance. While inflation, high interest rates and job market uncertainty continue to weigh on household budgets, the latest TransUnion Consumer Pulse Study for Q2 2025* reveals a population adjusting not just defensively, but proactively. From rethinking spending and saving to becoming more discerning about credit and fraud, South Africans are adopting behaviours that suggest a shift toward long-term financial resilience, especially among younger generations.
“South Africans are showing resilience with purpose,” said Ayesha Hatea, director of research and consulting at TransUnion. “They’re not simply reacting to pressure, they’re taking charge, rebalancing their finances and protecting their future.”
Mixed Incomes, Bold Adjustments
While there are some positive signs, many households are still experiencing fluctuations in their income. In the second quarter, 21% of consumers said their household income had decreased, while 38% reported an increase. A majority of respondents (75%) are hopeful that their earnings will increase in the next year. However, this confidence exists alongside financial challenges, with nearly 39% of consumers reporting that they expect they might miss at least one bill or loan payment in the near future.
This financial pressure is driving noticeable changes in how people manage their money. More than half of consumers (54%) trimmed back on non-essential expenses like dining out, entertainment and travel. Many are also taking steps to strengthen their financial security; 31% paid down debt faster, 24% put more into emergency savings or stokvels and 37% planned to increase their retirement or investment savings.
Generational Differences Define the Shift
While overall behaviours are trending positive, the evolution is not uniform across age groups. Younger consumers, particularly Gen Z (ages 18-28) and Millennials (29-44) are emerging as drivers of this transformation. They are more likely to apply for credit, monitor their credit reports frequently and adopt security tools like multi-factor authentication.
Forty-five percent of Gen Z respondents and 39% of Millennials indicated they plan to apply for or refinance credit in the next year, compared to just 27% of Gen X (45-60) and 15% of Baby Boomers (61+). They are also the most engaged in monitoring their credit monthly and believe that access to alternative data, such as rental or Buy Now Pay Later (BNPL) payment histories, would improve their credit scores.
“Younger South Africans are embracing financial tools with growing confidence,” Hatea added. “They’re more comfortable with digital platforms, increasingly aware of how their financial choices affect their long-term goals, and, as a result, are more proactive about managing their credit.”
Cautious Credit Intent Amid Access Concerns
While 92% of consumers believe access to credit is important to achieving their financial goals, only 36% intend to apply for credit in the coming year, a figure that has remained stable since Q1. This cautious demand reflects continued uncertainty around employment, income and affordability.
Consumers favour unsecured lending, with credit cards (30%), personal loans (28%) and BNPL services (25%) attracting the most interest. Interest in secured lending remains comparatively low, with only 22% planning to apply for vehicle finance and 19% expressing interest in home loans.
Still, barriers remain. Nearly half (48%) of consumers said they had considered applying for credit but ultimately decided not to. The main reasons were income/ employment status (30%), high borrowing costs (29%) and concerns about their credit history (27%). Overall, 45% of consumers believed they would be approved if they applied for credit. While this figure reflects general sentiment, optimism tends to be higher among those who actively monitor their credit, suggesting a link between financial awareness and confidence.
Digital Fraud on the Rise, but So Is Awareness
As digital engagement grows, so does the threat of fraud. In Q2 2025, 58% of South Africans reported being targeted by fraud schemes, a decrease from the previous quarter (61%) with 13% confirming they had fallen victim. The most common scams included gift card or money transfer scams (33%), phishing (31%), smishing (30%) and third-party seller scams (28%).
Consumers are responding with heightened vigilance in response to cyber security concerns. A majority (59%) changed their passwords, 39% checked their credit reports and 25% added multi-factor authentication. Gen Z and Millennials were the most likely to take protective action, a likely result of both their greater exposure to digital platforms and higher awareness of evolving scam tactics. Alarmingly, 21% of consumers said they took no action at all, often citing uncertainty about what to do. This highlights the ongoing need for stronger cybersecurity and fraud education, and accessible protection tools.
“Consumers are trying to keep pace, but the threat landscape is evolving quickly,” said Hatea. “What we need now is a national conversation, one that gives all South Africans the knowledge and resources to protect their identities in a digital-first world.”
A Financial Turning Point
The Q2 2025 Consumer Pulse Study reveals a country making deliberate financial choices in the face of uncertainty. South Africans are shifting from survival mode to a more balanced, future-focused financial mindset. While challenges remain, the direction is clear; consumers are becoming more selective in how they spend, more strategic in how they borrow and more vigilant in how they protect themselves.
“At TransUnion, we believe these shifts represent not just resilience, but growth,” concluded Hatea. “South Africans are taking ownership of their financial journeys and in doing so, they’re laying the groundwork for lasting stability and inclusion.”
Consumers can get their free annual credit report from TransUnion here.
* This online survey of 922 adults was conducted May 5–25, 2025
5 Smart Strategies to Manage Debt and Interest Rates in 2025
South Africans are learning to live and thrive in a financially uncertain world. The latest TransUnion Consumer Pulse Study (Q2 2025) shows that while 39% of households expect they may miss at least one bill or loan payment, many are actively reshaping their habits to build financial resilience.
Encouragingly, 31% of consumers are paying down debt faster, 24% are boosting emergency savings, and 37% plan to increase their retirement or investment contributions. These trends suggest that South Africans are not only reacting to pressure, but they are also taking proactive steps to protect their financial futures.
Ayesha Hatea, director of research and consulting at TransUnion South Africa shares some tips and tricks to help you manage debt and interest rates more effectively in 2025:
1. Pay Off High-Interest Debt First
The study highlights that more consumers are accelerating debt repayment and for good reason. Credit cards and personal loans often carry the highest interest rates when looking at consumers with multiple products in their wallet.
“In a high-interest environment, every rand you pay off today saves you from paying more interest tomorrow,” says Hatea
Tip: List your debts and focus on paying off the ones with the highest rates first, while keeping up with minimum payments on the rest.
2. Be Strategic About Borrowing
Access to credit remains crucial. 92% of South Africans believe it’s important for achieving their goals. Yet only 36% intend to apply for credit in the next year, reflecting caution amid high borrowing costs and income uncertainty.
If you do borrow, make it purposeful. The study found that demand is strongest for credit cards (30%), personal loans (28%), and Buy Now, Pay Later services (25%) but remember, these are all unsecured products that can quickly become costly if not managed well.
Tip: Compare interest rates, fees, and repayment terms before taking on new credit. Avoid unnecessary borrowing for short-term wants when rates are high or if you aren’t sure you’ll be able to make the necessary repayments.
3. Build a Safety Net, Even Small Steps Count
Nearly one in four consumers (24%) increased contributions to emergency savings or stokvels in Q2. In addition, 37% plan to grow their retirement or investment savings in the coming months.
Tip: Start with a modest, consistent contribution to an emergency fund, even R200 a month can create a buffer that reduces reliance on credit when life throws curveballs.
4. Strengthen Your Financial Awareness
The study shows that 70% of South Africans check their credit reports at least quarterly, with Gen Z and Millennials leading the way. Those who actively monitor their credit tend to feel more confident and have a better understanding of their overall financial commitments.
Tip: Check your credit report regularly, track your score, and make sure all information is accurate. Awareness is power when it comes to negotiating better credit terms.
5. Protect Yourself Against Digital Fraud
Fraud remains a real risk with 58% of South Africans saying they were targeted by scams in Q2, and 13% fell victim. Younger generations are more likely to adopt safeguards like multi-factor authentication, but 21% of consumers took no action at all.
Tip: Use strong, unique passwords, enable two-factor authentication, and monitor your accounts for unusual activity. Protecting your identity is just as important as protecting your money.
The Bottom Line
The TransUnion Consumer Pulse Study shows that while many households remain under pressure, South Africans are becoming more selective in how they spend, strategic in how they borrow, and vigilant in how they protect themselves.
“Resilience comes from balance: focus on responsible spending and borrowing, reduce costly or unsustainable debt, and build savings to protect against future shocks,” Ayesha concludes.
By taking small, deliberate steps today, households can better manage debt and interest rate uncertainty and build financial stability for tomorrow.
South Africa’s Automotive Market Accelerates to 11-Year High as Value Brands and Younger Buyers Drive Momentum
- 111 697 new passenger vehicles sold in Q3 – up 23.4% year-on-year, the highest quarterly total since 2014
- Chinese brands captured a record 15%+ market share, growing almost nine times faster than the market average
- Passenger-vehicle exports rebounded 4.1% year-on-year, powered by a 63.7% September surge to a six-year high
South Africa’s automotive market shifted into top gear in the third quarter of 2025, posting its strongest sales performance in more than a decade as greater macro-economic stability, easing interest rates and a firmer rand supported renewed consumer demand. According to TransUnion’s Q3 2025 Mobility Insights Report, total new-passenger-vehicle sales reached 111 697 units, 23.4% higher year-on-year (YoY), while new vehicle inflation dropped to a record low of 1.5% (since tracking began in 2008), creating one of the most competitive pricing environments in recent memory.
“Affordability and choice are redefining South Africa’s automotive landscape,” says Lee Naik, CEO TransUnion Africa. “Consumers are seeking greater value and flexibility and manufacturers that meet this demand through innovation and pricing discipline are winning the race for growth.”
Affordability Drives Record Growth and Market Realignment
Although established OEMs returned to positive growth in Q2 and Q3 2025, the market’s transformation is being led by Chinese manufacturers expanding nearly nine times faster than the overall market, with YoY growth of 89% in Q2 and 88% in Q3.
Their combined share has quadrupled since 2021 to more than 15%, powered by competitively priced, feature-rich SUVs and sedans that appeal to cost-conscious yet tech-savvy buyers. Top-performing value brands YoY included JAC (67% volume increase), GWM (54%), Mahindra (42%) and Chery (35%), while BMW (27%) proved that premium marques can still thrive by combining desirability with strong product pipelines.
“This isn’t a short-term surge, it’s a structural reset,” adds Naik. “The success of value-driven models shows how affordability, technology and trust are now the true levers of brand growth in South Africa.”
Younger and High-Income Buyers Sustain Demand
Despite surging sales, TransUnion’s recent Consumer Pulse Survey shows a modest easing in purchase intent, with the share of respondents likely to buy a vehicle in the next three months declining from 19% in Q2 to 17% in Q3. The report suggests that current sales momentum is being driven primarily by pent-up demand, dealer incentives and fleet renewals, rather than broad-based consumer confidence.
Purchase behaviour also remains sharply segmented across both age and income groups. 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. From an income perspective, high-income households earning R200 000 or more per month show the strongest intent at 34%, while middle- and lower-income consumers remain significantly more cautious in their purchasing outlook.
Electrification: A Tale of Price and Generation
Internal-combustion vehicles (ICE) remain the single largest category in consumer purchase intent, accounting for 42% of consumer preference, while interest in hybrid (39%) and plug-in hybrid (24%) models is steadily increasing. The shift toward electrification is most pronounced among Gen Z consumers, with 55% favouring hybrids and 32% considering battery-electric vehicles (BEVs).
This generational shift toward greener technology is evident among high-income buyers, with 75% considering plug-in hybrids, driven primarily by their perceived affordability. In contrast, preference for ICE vehicles remains largely affordability-based among lower-income segments. Higher budgets within affluent households enable greater consideration of hybrid electric (HEV), plug-in hybrid (PHEV), and battery electric vehicles (BEV), reinforcing an emerging “electrification divide.” This dynamic presents a significant opportunity for OEMs and financiers to tailor product offerings and financing strategies to meet the distinct needs of different age and income segments.
Connected Cars: Data Becomes the New Engine
Q3’s Mobility Insights Report special feature, The Connected Road, explores how connected-car technology is transforming mobility. Connectivity is now standard in most post-2015 vehicles, enabling real-time navigation, predictive maintenance, remote access, and advanced safety systems. Yet global data warns of “connectivity fatigue”: Over three quarters (76%) of drivers internationally don’t subscribe to connected services, mainly due to cost.
Naik says: “South Africa has a chance to leapfrog global missteps by focusing on value-adding applications, safer driving, cheaper insurance and smarter maintenance rather than gimmicks.”
Exports Rebound and Dealer Confidence Climbs
Passenger-vehicle unit exports rose 4.1% YoY after a steep Q2 contraction, driven by a 63.7% September surge that lifted shipments to a six-year high. Meanwhile, the RMB/BER Motor Traders Confidence Index advanced to 54, marking its second net-positive reading of 2025 and notably placing it above the neutral 50-point mark, which signals growing dealer optimism amid sustained sales momentum and improving export conditions.
Balancing Value and Transformation
The convergence of affordability, segmentation, electrification, and connectivity signals a pivotal shift in the automotive industry. “The future belongs to brands and financiers that master both the value-driven present and the connected, electrified future,” concludes Naik. “Data-led insight will be the bridge that connects today’s strategies with tomorrow’s innovation
Read the full TransUnion South Africa Q3 2025 Mobility Insights Report here.
South African Automotive Market: Recovery Gains Traction but Headwinds Persist
- New passenger sales rose 22.5% year-on-year, the strongest volumes since 2014
- Chinese automakers expanded their market share to nearly 15%, up from just 3.1% in 2022
- Passenger-vehicle exports contracted sharply, down 24.6% amid weaker global demand and new US tariffs
TransUnion’s latest Mobility Insights Report shows South Africa’s automotive market building momentum in 2025, supported by a favourable interest rate environment, record-low new-vehicle inflation, and liquidity from the two-pot pension reform. While recovery is underway, the outlook remains fragile, with affordability constraints and export headwinds threatening longer-term growth.
Supportive Shifts, But Growth Remains Fragile
The South African Reserve Bank has cut interest rates five times since September 2024 and inflation has returned to the lower end of the 3-6% band1, providing households with some relief. Consumer confidence has improved among middle- and higher-income groups, although low-income consumers continue to face pressure from food and electricity costs2.
“These macro shifts provide short-term support to the vehicle market, but momentum is likely to taper in 2026 without further reforms,” said Lee Naik, CEO of TransUnion Africa.
Affordability And Value Drive a Surge
Passenger car sales broke through the 35,000-unit ceiling for the first time in years, with July and August 2025 marking the strongest volumes since 2014. According to Naamsa, new passenger car sales grew 22.5% year-over-year (YoY) in Q2, fuelled by lower borrowing costs, aggressive OEM incentives and the entry of new value-focused brands.
Chinese automakers continued their rapid growth, expanding market share from 3.1% in 2022 to nearly 15% in Q2 2025. Their affordable, tech-rich SUVs and expanding dealer networks are reshaping competition, forcing legacy OEMs to rethink pricing, features, and model cycles. Toyota retained overall leadership, with Suzuki securing second place for the second consecutive quarter.
“Improved affordability, aggressive incentives and growing demand for value brands, alongside modest support from two-pot withdrawals, helped sustain momentum through 2025. However, as interest rates remain elevated and credit conditions tighten, and the two-pot effect normalises, growth is expected to moderate in 2026, with export risks and rand volatility adding uncertainty,” said Naik.
Diverging Trends: New vs. Used Vehicle Demand
NaTIS data shows new registrations rising 20% YoY in Q2 2025, led by Northern Cape, Free State and Northwest. In contrast, used registrations declined by 1.4%, reflecting pressure in that segment.
Across all vehicle sales, the Used-to-New Vehicle Registration Ratio rose to 3.2 in Q2, up from 2.5 in Q1, indicating a quarter-on-quarter increase in the relative share of used vehicle registrations. However, this remains below the 3.8 ratio seen through much of 2024, suggesting that new vehicles have regained some ground YoY. While used vehicles continue to dominate overall registrations, the market has shifted slightly back toward new vehicles compared to last year. This nuanced divergence presents opportunities for OEMs and dealer networks, while independent used dealers continue to face headwinds.
Exports Slump Amid Global Shocks
While domestic momentum improves, passenger vehicle exports fell 24.6% in Q2 2025 due to softer global demand and new US tariffs of up to 30%. Premium models, heavily reliant on the US and European markets, are under pressure, raising concerns for production, jobs, and investment.
Two-pot Withdrawals: Targeted Liquidity with Visible Impact
The September 2024 two-pot retirement reform injected liquidity into households, with evidence from the Bureau of Market Research suggesting a direct impact on mobility demand3, particularly in the used car market. While withdrawals were generally insufficient to fund deposits for new vehicles, they provided meaningful support to affordability-driven used vehicle purchases.
The reform is offering short-term relief rather than long-term wealth extraction, with withdrawals largely used for deposits, consumption, or debt repayment. Generational differences are evident: Millennials (aged 29 to 44) and younger Gen X (aged 18 to 28) are the most active claimants, while Baby Boomers withdraw minimally. Repeat withdrawals are becoming more common, suggesting both ongoing financial strain and the emergence of a recurring source of liquidity for entry-level and mid-market segments4.
“Two-pot withdrawals were not the only factor lifting sales,” noted Naik. “But the timing, scale and claimant profile suggest they acted as a meaningful catalyst for incremental used-car purchases.”
What Industry Players Should Do Next
Looking ahead, TransUnion advises that OEMs, dealers and lenders recalibrate strategies to balance domestic opportunities with external risks. Industry participants should align campaigns with liquidity cycles, planning promotions and stock availability around expected two-pot withdrawal windows.
Affordability must remain the priority, with a sharpened focus on value brands, certified pre-owned vehicles, and models that deliver a strong total cost of ownership. Financing solutions should also evolve, offering deposit support, trade-in boosters, and more flexible terms, while carefully monitoring repayment behaviour to manage post-purchase risk.
At the same time, leveraging data-driven insights, integrating credit and registration analytics to identify liquidity-sensitive buyers, preapprove customers, and track repayment performance, will be critical for sustaining growth in an uncertain environment.
“South Africa’s auto market is regaining momentum, but it’s a fragile recovery,” said Naik. “Those who time offers to policy-driven liquidity, sharpen affordability, and manage risk proactively will be best placed to capture growth.”
Read the full TransUnion South Africa Mobility Insights Report here.
ENDS
Notes to Editors: The Q2 2025 release is the second edition of the TransUnion South Africa Mobility Insights Report, formerly known as the Vehicle Pricing Index. The rebranded report now captures broader consumer, financing, and insurance insights across the mobility ecosystem.
Sources:
1 South African Reserve Bank (SARB)
2 TransUnion-South-Africa-CCI-Report-H2-2025-V9.pdf
3 Two-pot-claims-and-credit-data-FINAL.pdf
4 FAnews: Majority of two-pot withdrawals in the new tax year are repeat withdrawals; Moneyweb: Two-pot withdrawal: repeat claims surge; and Moneyweb, Two-pot payouts surge to R57B, with 4m withdrawals to date.
South Africa’s Credit Market Expanded During Q2 2025 Amid Eased Interest Rates and Shifting Consumer Risk
- Millennial consumers drove significant new credit card growth, although new card limits dropped significantly
- Vehicle asset finance growth trend continued, with more than two thirds of loans originated by Gen Z and Millennial consumers
- Eased interest rates drove year-over-year growth in home loan originations, although affordability pressures may be impacting performance
South Africans responded to a more favourable interest rate environment during Q2 2025, leading to increased new account originations across most consumer credit products, particularly for credit cards and vehicle finance. Home loan activity also showed signs of recovery, as consumers felt more confident in committing to longer-term credit obligations. Retail revolving loans were the exception, with origination volumes declining despite growth in balances.
These are some of the findings of TransUnion’s Q2 2025 South Africa Industry Insights Report, which also found that South Africans were managing their credit better, as delinquencies improved across most consumer credit products during the quarter.
Credit Card Market Continued Upward Trajectory
Credit card originations increased by a robust 36.5% year-over-year (YoY), underscoring this product’s relevance as a flexible financial tool for consumers seeking convenience and/or liquidity in what remains a challenging economic environment. Millennials (born 1980 to 1994) drove this growth, with originations in this cohort making up 47.6% of all originations in the period.
Lenders seeking to expand market share continued to extend credit to consumers in higher-risk prime and below risk tiers[1], with originations to subprime consumers increased by 49.2% YoY. They balanced this growth among higher-risk borrowers with smaller credit limits. The average credit limit on new credit cards decreased by 19.5% YoY during the quarter.
Delinquency trends showed mixed results. Credit card balance-level delinquency rose slightly to 18.1%, up 13 basis points (bps) YoY, indicating a marginal increase in overdue balances. In contrast, account-level delinquency rates declined by 32 bps YoY to 12.1%. This decline in account-level delinquency suggests that while some consumers accumulated larger balances, many were able to make payments to keep their accounts active.
“The latest credit cards trends reflect strategic credit use and disciplined repayment behaviour among a financially stretched borrower base,” said Ayesha Hatea, director of research and consulting at TransUnion South Africa. “The combination of rising origination volumes and shrinking new credit lines suggests that lenders are working to balance growth with prudent risk management. Lenders may need to refine their segmentation strategies, enhance early warning systems, and tailor credit line management to sustain portfolio health while supporting customers’ financial needs.”
Vehicle Asset Finance Shows Continued Growth
Vehicle asset finance originations increased by 21.0% YoY in Q2 2025, and average new loan amounts increased by 3.5% while the number of active accounts increased by 2.1% YoY. Growth was mainly driven by Gen Z (aged 18 to 28) and Millennial (aged 29 to 44) consumers who accounted for 64.3% of originations.
Outstanding balances grew by 7.6% YoY, and average balances have increased by more than 30% over the last five years, reflecting both higher vehicle prices and a sustained trend toward longer loan terms, which slows loan balance paydown rates. Loan terms granted during Q2 2025 averaged 74 months, up from 73 months in Q2 2024 and 72 months in Q2 2023. Longer loan terms, while slowing balance paydown, result in lower monthly payment amounts, which help consumers manage monthly cash flow in a high-cost environment.
Younger consumers are beginning to look for more ways to enter the vehicle market, including taking advantage of more cost-effective imported vehicles. However, 65% of vehicle finance originations were made by repeat buyers during Q2 2025, suggesting that access to vehicle finance remains limited for new entrants. At the same time, lenders need to be mindful of rising risk levels: in the second quarter of 2025, 44% of new-to-vehicle finance consumers fell into the subprime risk tier. These trends highlight the need for lenders to design credit products that support younger buyers, while ensuring responsible credit practices are upheld.
Account-level delinquencies for vehicle asset finance improved by 24 bps YoY to 5.1%, demonstrating that repayment behaviour for this product remained relatively stable, and that the overall risk profile of this portfolio is improving.
“For vehicle finance lenders, the rise in originations alongside modest growth in loan amounts suggests an opportunity to support demand while maintaining portfolio discipline,” said Hatea. “The improvement in delinquency rates is encouraging, but ongoing monitoring will be essential as economic recovery remains uneven. Vehicle finance lenders may benefit from refining pricing models, reassessing vehicle segmentation strategies, and balancing growth with prudent risk management.”
Home Loan Market Responds Positively to Eased Interest Rates
Lower interest rates, moderating inflation and improved real wage growth led to stronger consumer sentiment, giving lenders an opportunity to re-engage with consumers seeking home loans. New home loan account originations increased by 6.8% YoY during Q2 2025, showing early signs of recovery after declines in growth over previous quarters.
Favourable interest rate conditions and enhanced credit access drove broader access to home ownership this quarter, with 51% of home loans granted to individuals taking a home loan for the first time — the highest proportion in over five years. Among these, 56% were Millennials and 24% were Gen Z.
Delinquency trends showed mild deterioration, with the account-level delinquency rate increased by 29 bps to 7.5%. These movements suggest that while the market is stabilising, repayment stress remains a concern.
“These trends indicate a home loan market that is stabilising, but not without risk,” said Hatea. “For home loan lenders, the uptick in originations presents an opportunity to re-engage with the market, but rising delinquency rates underscore the need for vigilance. Portfolio strategies may need to shift toward enhanced consumer profile assessments, proactive risk monitoring, and targeted engagement with borrowers showing early signs of strain. As the market navigates this transitional phase, balancing growth with resilience will be key.”
Table 1: Key South African Credit Market Metrics (Q2 2025 vs Q2 2024)
|
Product |
YoY origination growth |
Serious account-level delinquency rate* |
YoY basis points (bps) change in delinquency rate |
| Credit card |
36.5% |
12.1% |
-32 bps |
| Bank personal loan |
2.2% |
25.9% |
-72 bps |
| Non-bank personal loan |
18.8% |
41.3% |
256 bps |
| Clothing accounts |
6.5% |
25.9% |
-265 bps |
| Retail instalment |
21.4% |
25.5% |
-238 bps |
| Retail revolving |
-6.3% |
14.9% |
-251 bps |
| Home loans |
6.8% |
7.5% |
29 bps |
| Vehicle finance |
21.0% |
5.1% |
-24 bps |
*Account-level serious delinquency rate, measured as a percentage of accounts three or more months in arrears
[1] Scores are based on TransUnion’s CreditVision® generic scoring methodology. Risk distribution key: subprime (0-625), near prime (626-655), prime (656-695), prime plus (696-720), super prime (721-999).
Three Simple Ways to Become Credit-Smart
Understanding your credit score isn’t just for people taking out big loans or mortgages, it impacts everyday financial opportunities. A healthy credit score can help you qualify for better intertest rates, faster approvals, and stronger protection against fraud by regularly checking your report. Learning how credit works – and sharing that knowledge – is one of the most powerful financial gifts you can give.
Why Knowing Your Credit Score Matters
Traditionally, your credit score is a snapshot of how well you have managed credit and debt in the past, based on the information in your credit report. Lenders, landlords, insurers, and even employers sometimes use it (or check related credit data) to assess risk. If your score is strong, you could qualify for better interest rates or favourable credit terms. But if it’s weak or contains errors, you might end up paying more or having applications declined.
But it’s not just about access. Reviewing your own credit report gives you valuable insight into your financial history. It shows you what accounts are open, whether payments were missed, and if any accounts were opened fraudulently in your name. That kind of awareness helps you move from being passive to active in managing your financial life.
This shift is already visible in South Africa. According to TransUnion’s Q3 2025 Consumer Pulse Study, 35% of respondents checked their credit report for signs of fraudulent activity, while 51% did so to improve their credit score.
Fatgie Adams, Head of Credit Risk Solutions at TransUnion, explains: “Understanding your credit report and score is one of the simplest yet most powerful ways to take control of your financial future.”
Given that many South Africans expect to apply for or refinance credit in the coming year (about 37%, according to the same study), knowing where you stand becomes even more critical.
Three Simple Ways to Understand Your Credit Score
Understanding your credit score doesn’t require fancy tools or technical knowledge. Here are three clear, practical steps to help you take charge:
1. Go Through Your Credit Report
Start by accessing your credit report, many credit bureaus or services offer free or low-cost access. Review the main sections carefully:
- Active accounts: Which credit lines or loans are currently open?
- Payment history: Were payments made on time, or were any missed?
- Credit inquiries: Who has recently requested access to your credit information?
- Balances vs. limits: How much of your available credit are you using?
Going through each section helps you spot errors (for example, an unexpected account) or identify areas for improvement. This simple exercise turns your credit score from a mystery number into a tool you can understand and manage.
2. Understand How Everyday Habits Affect Your Score
Many people assume a credit score is fixed, but it changes over time, and many factors are within your control:
- Pay on time: Late or missed payments often have the biggest negative impact.
- Use credit conservatively: Using less than 30% of your available credit generally helps your score.
- Avoid multiple new credit lines at once: Too many recent applications can signal risk to lenders.
- Be consistent: A steady, predictable credit history is viewed more favourably than big fluctuations.
3. Review Regularly to Catch Fraud or Changes Early
Credit monitoring isn’t just about improving your score it’s also a defence against fraud. Make it a habit to:
- Check your credit report every few months, or before major financial decisions.
- Look for new accounts you didn’t open.
- Check for unfamiliar credit enquiries.
- Compare balances against known credit limits.
- Dispute any suspicious entries promptly.
Treat reviewing your credit report as a financial hygiene routine, one that helps you catch issues early before they escalate. Adams adds: “Reviewing your credit report data regularly helps you see how daily decisions affect your score. That visibility lets you catch issues before they become serious.”
Why This Matters Beyond Individuals
Many South Africans continue to face challenges accessing formal credit and quality financial services. Traditional systems often feel exclusive, especially for underserved individuals and small businesses, because formal credit systems rely heavily on past borrowing behaviour as the main measure of creditworthiness.
According to TransUnion’s CreditVision® Telco Data Score modelling, over 1.4 million credit-invisible South Africans open new credit accounts each year, contributing to more than four million new accounts over the past three years. Yet traditional scoring models frequently fail to assess these consumers accurately, leaving over 16 million adults outside the formal credit system. Successfully integrating these and other excluded consumers into the economy could contribute an estimated R173 billion to South Africa’s GDP.
TransUnion is shifting the paradigm by embracing alternative data and developing new scoring models for example, using utility or mobile payment patterns (with user consent) to ensure that individuals who were once unclassifiable can now be assessed fairly and accurately. Its “Be the Reason Things Change” campaign responds to this need by equipping the public with practical tools, credit education, and the confidence to take charge of their financial futures.
“Greater credit visibility and education can lead to fairer interest rates, fewer surprises in loan applications, and stronger trust in financial systems,” says Adams. “When more people are credit-aware, lenders and markets work better too. Credit education is not a niche luxury; it’s a critical tool for building financial resilience and inclusion.”
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