South Africa's new vehicle market closed the third quarter with a 12.7% year-on-year increase in sales to 61,645 units in September, according to naamsa. This growth comes despite affordability pressures and a recent 25 basis point increase in the repo rate to 7.25%. The increase in sales suggests that buyers are adjusting their finance deals to cope with higher borrowing costs.
Passenger vehicle sales saw a significant increase of 14.7% to 44,291 units, while light commercial vehicles, including bakkies and minibuses, grew by 9.6% to 14,361 units. Dealer sales accounted for 81.4% of the market, with the rental industry contributing 13.8% of total industry sales. This indicates a strong demand for vehicles in the country.
According to Thanda Sithole, Senior Economist at FNB and WesBank, demand for vehicles "remains resilient, even as consumers face higher borrowing costs and renewed pressure from fuel and other living expenses". WesBank's new vehicle finance applications grew year-on-year and at a faster rate than total vehicle applications, indicating a strong appetite for vehicle finance.
WesBank customers are adjusting how they structure their vehicle purchases, with new vehicle applications making up a larger share of total applications than a year ago. The average new vehicle finance deal was smaller than a year ago, while the average used vehicle deal was larger. Contract terms lengthened, particularly for new vehicles, and more customers chose fixed-rate finance for certainty on monthly repayments.
The total cost of ownership is becoming a key consideration for vehicle buyers, with running costs such as fuel, insurance, maintenance, and instalment costs all playing a role in affordability. Headline inflation increased to 4.4% in August from 4.3% in July, with fuel among the contributors, and higher fuel prices are expected to add further pressure on household budgets in October.
New energy vehicle sales are on the rise, with 18,945 units sold in the first eight months of 2026, already 13.4% above the 16,703 units sold during the whole of 2025. Approximately one in every 20 new vehicles sold this year is electrified, with plug-in hybrids and battery electric vehicles accounting for more than half of NEV sales.
The outlook for the final quarter of the year is uncertain, with Sithole noting that the next few months will show how consumers adapt as the latest repo rate increase feeds through to repayments. Buyers can compare finance terms, instalments, and fixed- and linked-rate options using WesBank's online finance calculators before applying. Key factors such as affordability and the total cost of ownership will likely continue to influence vehicle sales in the coming months.
Key points
- New vehicle sales in South Africa increased by 12.7% to 61,645 units in September.
- The repo rate was recently increased to 7.25%, but buyers are adjusting their finance deals to cope with higher borrowing costs.
- New energy vehicle sales are on the rise, with 18,945 units sold in the first eight months of 2026.
