South Africa’s economic headwinds are blowing harder than ever. Years of persistent inflation, rising interest rates, stagnating growth, and a weakening rand have left households struggling to make ends meet. The cost of living is climbing across the board — and for many, mobility is becoming an unaffordable luxury.
One of the more alarming indicators of this pressure is the country’s household debt-to-income ratio, which reached 62.0% in the fourth quarter of 2024, according to the South African Reserve Bank. That means for every rand of disposable income, 62 cents are already committed to servicing debt. Simultaneously, Prism scores — used by lenders to predict the likelihood of consumer default — have been in steady decline, signalling eroding credit health. More South Africans are being declined for credit, locking them out of traditional finance options and, by extension, the ability to finance a vehicle.
In this context, it’s worth asking a hard question: is the traditional vehicle finance model still working for South African consumers?
The Strain on a Once-Stable Model
For decades, instalment sale agreements were the cornerstone of vehicle finance in South Africa. They helped support a rising middle class, offering a clear path to ownership. But as affordability wanes, the cracks in this model are growing too wide to ignore.
Vehicle prices have risen well above inflation, while consumers’ real incomes have failed to keep pace. Today, securing finance often means jumping through more hoops: higher deposits, stricter affordability assessments, and larger monthly instalments. These barriers are especially steep for first-time buyers and those with limited or deteriorating credit histories.
For many, the dream of car ownership is slipping out of reach. And the implications go far beyond personal convenience. Without mobility, participation in work, education, and enterprise becomes significantly harder — entrenching cycles of exclusion in a country where access already remains uneven.
Learning from Global Trends
Globally, forward-thinking financial institutions and mobility providers are reshaping what it means to access a vehicle. In markets such as the United States, Europe, and parts of Asia, alternative models — like vehicle subscriptions, flexible leasing, and usage-based finance — are rapidly gaining ground.
These models focus less on ownership and more on access, flexibility, and affordability. In the UK, for example, PwC research shows that nearly half of consumers would choose a subscription model over traditional purchasing or financing.1 And younger generations are leading this change: Deloitte’s 2025 Global Automotive Consumer Study found that consumers aged 18 to 34 across major markets are increasingly interested in mobility-as-a-service models, reflecting a generational pivot away from long-term ownership.
These shifts are being driven by necessity as much as preference. Consumers want to retain their mobility without becoming overburdened by debt. They value flexibility — the ability to change, pause, or return a vehicle as life circumstances evolve.
Regulatory Hurdles at Home
In South Africa, these alternative models remain difficult to scale — not due to a lack of demand, but because of regulatory misalignment. The National Credit Act (NCA), though crucial for consumer protection, is designed around credit agreements, not service-based models like subscriptions or pay-per-use mobility.
This creates a grey area where innovation is hampered by compliance uncertainty. As affordability assessments tighten further in response to rising debt levels, traditional finance could become even less accessible — unless regulation evolves to support new, consumer-friendly models.
Without deliberate change, there’s a real risk that mobility becomes a privilege of the few, reinforcing social and economic divides in a country already grappling with high inequality.
A Call for Change — and Collaboration
To ensure inclusive mobility, the finance sector must take a bold step forward. Innovation in vehicle finance must be centred on three key pillars:
- Flexibility: Models that cater to short-term commitments and evolving lifestyle needs.
- Affordability: Solutions that lower entry costs and tie payments to usage rather than ownership.
- Accessibility: A reimagined approach to assessing creditworthiness — one that reflects consumers’ current realities and financial behaviour, not just historic defaults.
This isn’t just about adapting to consumer needs. It’s about preserving mobility as a cornerstone of opportunity. Vehicle access unlocks economic participation — whether it’s getting to a job interview, transporting goods for a small business, or accessing education in underserved areas.
There is no silver bullet for South Africa’s economic challenges. But if we are to protect and expand access to mobility, we must rethink how we finance it. That means fostering innovation, encouraging collaboration across sectors, and embracing regulatory reform that enables more inclusive financial products.
At WesBank, we believe this is a journey worth taking. Because when people can move forward, so can the country. And in today’s economy, moving forward requires more than just wheels — it requires a finance model that truly moves with the times.
