South Africa’s economic landscape is challenging even the most resilient consumers. Recent years of high inflation and soaring interest rates, stagnant economic growth, rising fuel prices, and a weaker rand are putting tremendous pressure on household finances. To add to the squeeze, the cost of debt is climbing, and consumers’ creditworthiness is consistently deteriorating.
It is time to ask whether traditional vehicle finance solutions and installment sale agreements, which have dominated for decades, are still fit for purpose or whether South Africa, like other global markets facing similar headwinds, should accelerate the adoption of alternative models better aligned with today’s consumer realities.
For many years, traditional vehicle finance models catered to a growing middle class well. However, the current environment puts significant strain on affordability. Consumers face mounting barriers to entry, such as tough approval conditions, larger deposit requirements, and high monthly installments—often due to vehicle prices growing in excess of inflation—that are becoming out of reach.
The consistent decline in credit quality highlights the growing disconnect between vehicle prices and disposable incomes, resulting in a squeeze on mobility not just for personal freedom but also for economic participation. Without access to affordable vehicle solutions, many South Africans find themselves locked out of opportunities for work, education, and entrepreneurship.
Around the world, financial institutions are reimagining vehicle ownership. Countries like the United States, parts of Europe, and increasingly regions in Asia are witnessing growing acceptance of flexible vehicle finance options that de-emphasize ownership and focus instead on access, convenience, and flexibility. In the UK, for instance, a recent PwC study revealed that 49% of consumers would prefer a subscription-based model over conventional purchasing or financing when acquiring a vehicle.
A significant portion of respondents aged 18 to 34 across these and other markets expressed interest in moving away from conventional ownership in favor of mobility-as-a-service alternatives, underscoring a generational pivot toward more flexible, usage-based solutions.
In South Africa, regulatory frameworks have not yet caught up to these shifts. National Credit Act (NCA) requirements, though important for consumer protection, are designed around traditional credit models. Subscription or usage-based models — which are closer to service agreements than credit agreements fall into a grey area that often makes them harder to scale.
Moreover, as regulators move to tighten affordability assessments in response to rising consumer indebtedness, traditional vehicle finance could become even less accessible. Without complementary regulatory innovation, the market risks entrenching inequality in mobility access a direct contributor to broader economic exclusion. WesBank sees the opportunity and responsibility to drive alternative solutions that address current realities.
The proposition is that a move beyond the usual financing models by providing solutions would grant flexibility regarding shorter commitment periods and the ability to change or return vehicles with ease. It also demands a sharper focus on affordability by shifting from ownership-based structures to models that prioritize usage and access. Finally, improving accessibility means rethinking how creditworthiness is assessed moving toward models that reflect consumers’ real financial behaviors and resilience, rather than relying solely on historic credit scores.
The shift to alternative vehicle finance would not just be positive economically, but also socially. Declan Jones, Head of Vehicle Ecosystem Development at WesBank, states that “Mobility unlocks opportunity, drives participation in the economy, and contributes to the social fabric of South Africa. If we want to keep South Africans moving forward, we must evolve how we think about vehicle finance. The economy may be tight, but innovation, collaboration, and regulatory foresight can help us open new roads.”