- Data from Wesbank shows that vehicle finance applications have been growing each year since 2021.
- In 2023, Wesbank received over 826 000 vehicle finance applications from South Africans aged 35 and younger.
- Unfortunately, vehicle sales among the younger generation are down by as much as 8 percent over the last decade.
According to Wesbank, vehicle finance applications from young South Africans aged 35 and younger wanting to buy a car climbed for the third year in a row.
The firm reports that in 2021 it received 722 505 vehicle finance applications from millennials and Gen-Z. That figure rose to 806 458 in 2022 and 826 088 in 2023 and to Wesbank, that means youngsters want to own a car.
“This is contrary to previously held views by industry experts who suggested that a desire for private car ownership would wane amongst Millennials and Gen-Zs in favour of alternative forms of transport, such as e-hailing services,” says Lebo Gaoaketse, head of Marketing and Communication at WesBank.
Thanks to South Africa’s disappointing public transport systems, vehicle ownership is an implicit requirement for so many aspects of life including work. The problem, however, is that a car is a costly expense.
This is something Gaoaketse concedes that actual sales have slowed down by as much as 8 percent in the last decade. It doesn’t matter if a youngster wants a car, the fact is that they simply can’t afford one. Earlier this year Cars.co.za highlighted the most affordable new cars in South Africa with the Suzuki S-Presso coming in at the cheapest from R174 900.
Of course, that cost doesn’t mean much as most people are financing a vehicle which means that with interest, the total cost of ownership is far higher than the price tag. Add to that the monthly cost of insurance, fuel and maintenance and a vehicle becomes an unaffordable cost for many.
Last year, Nedbank outlined how a car that may have an installment of R4 000 per month can end up costing closer to R8 000 per month once all fees and sundry are accounted for. With the average salary of a graduate sitting at R19 214 per Talent, buying a car then is very much a luxury for young people.
“Viewed in conjunction with WesBank’s vehicle finance applications data, though, it becomes clear that the subdued sales are not a result of diminished desire for personal cars, but rather a symptom of a depressed economy and strained affordability across all age groups, including Millennials and Gen-Zs,” says Gaoaketse.
The marketing and comms head says that “more needs to be done to help young South Africans attain their aspiration for safe and reliable private mobility” but that’s besides the point.
South Africans, especially youngsters are struggling to make it through each month on a pittance of a salary as the cost of living soars higher.
So, while Wesbank’s data may show that Gen-Zs and millennials want cars, the painful fact is that owning a car is a dream as things stand.
This is bad news for those graduating and entering the job market where, as Gaoaketse concedes, a car is a requirement for many positions.
