The fourth quarter 2024 TransUnion South Africa Vehicle Pricing Index (VPI) report indicates a continued shift towards used vehicles in the South African automotive market, with financing for preowned vehicles now outpacing new-car financing at a ratio of 1.56 to 1, up from 1.23 to 1 in the final quarter of 2023.

Meanwhile, new-vehicle prices increased by 1.7%, while used-vehicle prices declined by 2.8%, making them a more attractive option for cost-conscious buyers.

Despite these challenges, new-vehicle finance agreements grew by 12.7% year-over-year (y-o-y), with Gen X and Millennials accounting for 67% of new agreements. (Gen X – born 1965-1980, Millennials – born 1981-1996, and Gen Z – born 1997-2012.)

“South Africa’s automotive sector is navigating a complex landscape, balancing recent economic improvements with persistent affordability challenges,” says TransUnion South Africa Auto Information Services sales VP Marcia Mayaba.

“The demand for used vehicles continues to grow, while we are also seeing an increasing shift towards alternative financing and ownership models, such as leasing and car subscriptions, particularly among younger consumers.”

Looking ahead, the newest TransUnion VPI highlights the rising potential of electric vehicles (EVs) in South Africa, signalling a significant shift in consumer interest and market dynamics.

“The country reached a milestone of more than a 1 000 battery electric vehicle (BEV) sales in 2024, a small but significant step in a market still dominated by petrol and diesel vehicles,” states the report.

“While EVs represent a fraction of total sales, the 60% y-o-y growth in hybrid and plug-in hybrid sales signals a gradual shift in consumer interest toward more sustainable options.”

The introduction of more affordable BEV models priced under R1-million, such as the BYD Dolphin and Seal, is expected to accelerate adoption this year.

However, affordability remains a key barrier, with high upfront costs and concerns around charging infrastructure limiting mainstream adoption, believes TransUnion.

“EV adoption in South Africa is gaining momentum, but for this growth to be sustained, industry players must collaborate to make ownership more accessible," notes Mayaba.

"With the right financial products, infrastructure expansion, and increased consumer awareness, EVs have the potential to reshape South Africa’s automotive landscape in the years to come.”