January is a month of new beginnings. New jobs, promotions, university acceptances, and relocations often come with longer commutes. For many South Africans, these transitions share a common need: reliable transport. The used car market is where these stories often start, and 2026 is shaping up to be an interesting year for buyers navigating this space.
Understanding what drives prices means looking beyond the sticker on the windscreen. After reaching a peak of 11.75%, the prime interest rate has dropped to 10.25% following cuts of 150 basis points since September 2024. Vehicle inflation hit a record low of 1.5% in 2025, the lowest since 2008. TransUnion data shows that used-to-new vehicle financing ratios climbed to 1.56:1 in the fourth quarter of 2024, up from 1.23:1 the previous year. Nearly half of all pre-owned purchases are now financed, with an average ticket size of R396,000.
What this means for buyers: if you plan carefully and budget responsibly, this can be a good time to enter the used car market.
Lebogang Gaoaketse, Head of Marketing and Communications at WesBank, explains: “The used car market does not operate in isolation from new vehicle sales. When new car sales grow, as they did dramatically in 2025, reaching 596,818 units, the highest since 2015, it creates a ripple effect that can positively affect the used vehicle market.”
More new cars eventually mean more trade-ins, which should increase used car supply and moderate prices. However, consumers are keeping vehicles longer, now six to eight years on average, which limits the availability of low-mileage, well-maintained cars in popular segments.
Body type trends are also shaping values. SUVs and crossovers now make up over 50% of the passenger vehicle market, up from 45.2% four years ago. Three-year-old compact SUVs often command a premium over similarly aged sedans, even with comparable mileage and condition.
The three-to-five-year-old segment remains the sweet spot for value. Vehicles in this band commanded 44.25% of the market in 2024, representing the point where cars have absorbed the steepest depreciation while still offering modern features, remaining warranty coverage, and manageable mileage.
Financing options have evolved, with more flexible terms and products tailored to different buyer profiles. Gaoaketse adds:
“A favourable interest rate means little if the monthly payment strains your budget. Total cost of ownership, including insurance, maintenance, fuel, and potential repairs, needs to sit comfortably within your means. Financing provides access, but financial discipline ensures sustainability.”
Looking ahead, several factors will shape the market this year. Stable or easing interest rates should support continued financing activity. NAAMSA forecasts 9–11% new vehicle growth in 2026, which could create more trade-ins later in the year, increasing quality used stock availability. Economic confidence will also play a key role, as sustained consumer optimism tends to benefit both new and used markets.
Interest in electric vehicles is growing, with approximately 36% of prospective buyers showing a preference for hybrids. As more electric and hybrid vehicles enter the market, this will gradually influence used vehicle availability, pricing, and buyer decisions. Infrastructure improvements, particularly in electricity supply, will affect consumer confidence in this segment.
Bottom line for consumers: preparation and patience pay off. Whether you are a graduate buying your first car, a family upgrading for growing needs, or seeking a reliable commuter, the opportunity exists. The difference between a smart purchase and a regrettable one often comes down to research, budgeting, and knowing what you are buying before stepping onto the dealership floor.
Hyper Kong
Business competition: In the 2017/2018 World Economic Forum (WEF) Global Competitiveness report, South Africa was ranked 61st out of 137 economies. This is the country’s lowest ranking ever. High levels of competition improves a country’s performance, increases business opportunities and reduces the costs of goods and services. This is the optimum environment for starting a new venture.