Buying a car in South Africa is a little easier now than it was a year or two ago, thanks to stable fuel prices, lower interest rates and moderate inflation. The current conditions are particularly favourable for drivers who plan to finance used cars, drive lots of kilometres, or upgrade their wheels, Ernest North, co-founder of insurance platform Naked Insurance, says. “Consumers are finally seeing some relief from the supply chain disruptions, rapidly rising car prices, and high interest rates that caused car ownership costs to spike as we came out of the pandemic.
“There are a few gentle tailwinds contributing towards increased affordability as we exit 2025. The prime interest rate is down to 10.25% after reaching a high of 11.75% in mid-2023. That translates into noticeably lower repayments for vehicles bought using vehicle financing.
“In addition,inflation decreased to around 3.4% to 3.5% for the second half of 2025, compared to an average of 6% in 2023. This means that prices for maintenance, services, insurance and other aspects of car ownership are not increasing as quickly as they were two years ago. “The fuel price also remained relatively flat in real terms over the past year, with official inland 95 unleaded prices at R21.30/litre in November 2024 compared to around R21.12/litre in November 2025.” North points out that another factor making a big difference is a slowdown in car price inflation.
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The TransUnion Vehicle Pricing Index showed that new-car prices increased by 7% and used-car prices by 9.1% year over year in the fourth quarter of 2023. More recent data reflects below-inflation price increases for new and used vehicles alike. He uses these two scenarios to highlight the impact of reduced inflation and lower interest rates for car buyers: North says conditions are favourable for used car buyers now because prices are not increasing as quickly as they were in 2022 and 2023.
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