Short relief, long pain: Why car loans cost 36% more in South Africa

South Africans are driving deeper into debt as car loans stretch over longer periods, offering short-term relief but adding heavy long-term costs.

Data from research firm Lightstone Auto shows that the average vehicle loan now runs for 72 months, six years, reflecting the country’s ongoing cost-of-living crisis. Many households are cutting back to a single car but financing it for longer, often without a deposit.

“South Africans are under immense pressure. They want mobility but can’t afford it upfront,” said Andrew Hibbert, a data analyst at Lightstone Auto. “The six-year repayment window has dominated since 2015, peaking at 87% of deals in 2020. Today, it still accounts for 72% of loans. But we’re now seeing even longer terms, some reaching eight years.”

More debt for short-term relief

A longer loan lowers monthly instalments, giving buyers breathing room. But it also piles on interest charges, leaving motorists paying far more than the car is worth.

Take the Toyota Corolla Cross, one of South Africa’s bestsellers, for instance. The entry-level model retails at R414,800, with the prime lending rate at 10.5%. Without a deposit, a 72-month contract works out to R7,881.19 per month.

By the end of the loan, the buyer pays R567,445.68, nearly R153,000 more than the sticker price. That’s a 36% increase due to interest alone.

Longer contracts becoming the norm

Back in 2015, five-year terms were the second most common option. But in 2025, eight-year contracts are climbing fast, replacing 60-month deals.

For many, it is the only way to afford a car, even though the long-term financial impact is severe. “The shift tells us cars are becoming unaffordable for the average South African,” Hibbert said.

A squeeze on families

The country’s economic struggles have forced households to adapt. Families that once owned two cars are often selling one to save money. But even then, the single car often comes with a loan that lasts nearly a decade.

Consumers, Hibbert warned, should be cautious. “Lower installments may ease the monthly burden, but the total cost is much higher. It’s a trade-off many don’t fully calculate until it’s too late,” he said.

The data underscores a painful reality: South Africans are keeping their wheels turning, but at a high price that may haunt them for years.

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