2 things South Africans are doing to lower their monthly car payments

The National Association of Automobile Manufacturers of South Africa (Naamsa) has published its sales data for September 2019, showing that vehicle sales declined ‘only’ 0.9% year-on-year to 49,191 units – the biggest sales month of the year so far.

Commenting on the data WesBank executive head of motor, Ghana Msibi, said three economic factors could have contributed to the numbers:

  • Consumer Price Inflation results announced during the month came within target at 4.3%;
  • Interest rates remained unchanged although hopes for a further cut before the end of the year remain;
  • GDP data for the second quarter headlined growth of 3.1%, raising confidence.

“WesBank’s own inflation data largely mirrors that of the general economy, our average deal size slightly above the South African number,” said Msibi.

“This infers that new and used car price inflation falls within the general affordability challenge for cash-strapped South African households.”

WesBank’s data showed that the average value of new cars financed was R329,580 – up substantially from R314,120 in September 2018.

Worryingly, WesBank said that a growing number of its customers are battling to finance their cars.

Msibi noted that drivers were doing two things to try and bring their monthly payments down – both of which speak to more worrying trends. They are

  • Extending their car repayment contracts towards the maximum 72 months, and
  • Adding balloon payments to reduce the monthly instalment amount

“Consumers should remain cautious of over-extending themselves and should rather buy at a more affordable price than use other finance mechanisms to fall within budget.”

Read: Beware if you commit car insurance fraud in South Africa

Must Read

Partner Content

Show comments

Trending Now

Follow Us

2 things South Africans are doing to lower their monthly car payments