Motoring

Bad news for anyone who cares about their vehicle’s resale value in South Africa

Malcolm Libera

 ·19 Sep 2026

South African motorists who care about the resale value of their vehicles have been warned that cheaper new Chinese cars are putting pressure on used-vehicle prices.

The trend is highlighted in FirstRand’s 2026 annual report, which showed that the rapid arrival of lower-priced vehicles has become a financial risk for WesBank, one of South Africa’s largest vehicle financiers.

WesBank’s normalised earnings fell 20% to R1.394 billion in the year ended June 2026, from R1.739 billion the previous year. Profit before tax also declined 20% to R1.909 billion, despite strong growth in vehicle finance.

Core lending advances increased 13% to R212.686 billion, while retail vehicle asset finance new business volumes grew 18%. Net interest income increased 5% to R6.347 billion.

However, credit impairments worsened, increasing 26% to R2.604 billion. The credit loss ratio increased to 1.30%, from 1.15%, while Stage 3 non-performing loans rose to 4.83% of advances.

The biggest pressure was felt in WesBank’s retail vehicle asset finance business, where profit before tax fell 35% to R1.016 billion.

Additionally, corporate and commercial profit before tax increased 8% to R893 million. The bank directly linked some of the pressure to the changing vehicle market.

“Chinese car brands are entering the market rapidly, offering advanced technologies, electric and hybrid options, and competitive pricing,” WesBank said.

It added that it had partnered with several Chinese brands through supplier and dealer agreements, which helped drive growth in advances.

However, for motorists, the increased supply of cheaper new vehicles has created a depreciation problem.

When consumers can buy a new vehicle with more features at a competitive price, older vehicles can become less attractive.

This can reduce the prices buyers are willing to pay for used cars, putting pressure on the resale value of vehicles already on South African roads.

The effect is already being felt by WesBank’s Fleet Management and Leasing business.

“The pressure reflects weaker used-vehicle prices following stronger new-vehicle supply and lower-priced market entrants,” WesBank said.

WesBank Financial Highlights Table (2026 vs. 2025)

Value for money is a key driver

The decline in used-car values also creates a risk for banks financing vehicles. A vehicle serves as collateral for a loan, meaning that if a customer defaults, the lender may repossess and sell it to recover some of the outstanding debt.

If the vehicle is worth less than expected, the bank can recover less money, increasing its loss if the customer defaults.

WesBank therefore raised a “judgemental management out-of-model adjustment” for the inherent LGD risk on used motor vehicle prices due to new lower-priced entrants to the South African market”.

The warning comes as TransUnion’s Q2 2026 Mobility Insights Report shows that affordability is increasingly influencing vehicle-buying decisions.

New passenger vehicle sales increased 15.8% year-on-year in the second quarter, but the used-to-new vehicle registration ratio climbed from 2.3 in the first quarter to 2.7 in the second.

Chinese brands are at the centre of this shift. Their sales increased 72% year-on-year in Q2 2026, giving them a 22.4% share of passenger and light commercial vehicle sales.

“Affordability has become one of the defining themes of South Africa’s mobility market,” said Ayesha Hatea, director of research and consulting at TransUnion Africa.

“Consumers are increasingly looking for the best overall value proposition rather than simply the lowest price.”