Vehicle Finance After the Rate Hike: What Your Car Loan Could Cost
South Africans are still buying new cars, with 61,645 new vehicles sold in September, up 12.7% on a year earlier. However, the rate hike adds pressure to household budgets, and the full effect on car buying is expected to become clearer over the next 60 to 90 days. WesBank reports that finance terms are getting longer and more customers are choosing fixed-rate deals for certainty. The tables below show what financing costs look like now and the trade-offs between common finance choices, and you can compare NCR-registered lenders on saloansonline.co.za.
| Measure | Latest Figure |
|---|---|
| Prime lending rate (from 25 September) | 10.75% |
| Average vehicle finance agreement | About 72 months (six years) |
| Cost to own a R294,000 hatchback | Over R11,700 per month, according to the Cars.co.za 2026 industry report |
| Interest on a roughly R300,000 car over 60 months at 10.75% prime | Over R87,300 |
| Stretching from 60 to 84 months on a roughly R300,000 car | Adds more than R55,000 in interest |
Your finance choices compared
| Choice | Upside | Watch Out For |
|---|---|---|
| Fixed interest rate | Certainty on monthly repayments if rates keep changing | Compare the fixed rate with the variable rate before signing |
| Longer term (72 to 84 months) | Lower monthly instalments | You pay much more interest over the life of the loan |
| Cheaper or used vehicle | Smaller loan and lower running costs | Check the vehicle’s condition and the total cost of ownership |
| Budget beyond the instalment | Avoids surprises from fuel, insurance and licensing costs | Vehicle finance, fuel, insurance and other essentials all compete for the same income |
Interest figures are illustrative estimates from industry reports and depend on your deposit, rate and term. Always ask for the total cost of credit in writing. This article is for information only and is not financial advice.
Sources
- Bad news for anyone applying for a car loan in South Africa (TopAuto)
- Motorists are taking out longer loans for cheaper cars (TopAuto)
- Bad news about cars under R200,000 (TopAuto)
- New-car sales continue to strengthen in September (Engineering News)
- South Africa’s best-selling new cars and bakkies in September (TimesLIVE)