South Africa’s young vehicle buyers shift gears as demand for new vehicles overtakes used cars

New vehicle purchases among Millennials and Gen Z grew 32% in 2026, while used vehicle growth moderated to 18% as affordability remains a key consideration

South Africa’s younger vehicle buyers continue to place affordability at the centre of their purchasing decisions, but a notable shift is emerging in the market as demand for new vehicles accelerates and begins to outpace growth in the used vehicle segment.

Internal insights from Absa Vehicle and Asset Finance (AVAF) show that consumers aged between 18 and 35 years, comprising Millennials and Generation Z, are becoming an increasingly influential force in the vehicle finance market. In 2026, Millennials and Generation Z accounted for 40% of all new vehicle finance applications and 45% of used vehicle finance applications. This translated into 32% of financed new vehicle sales and 39% of financed used vehicle sales, underscoring their growing influence on vehicle purchasing trends.

While affordability remains a key consideration, younger consumers are increasingly demonstrating confidence in purchasing new vehicles. New vehicle purchases among this segment increased by 57% between 2024 and 2025 and grew by a further 32% between 2025 and 2026. Over the same period, used vehicle purchases increased by 32% between 2024 and 2025, followed by a more moderate 18% increase between 2025 and 2026.

The data points to a significant market shift. Historically, younger buyers have favoured pre-owned vehicles because of their lower purchase prices and financing costs. However, 2026 marks a clear inflection point, with demand for new vehicles surpassing demand for used vehicles. The ratio of new-to-used vehicle purchases has continued to rise annually, reflecting changing consumer preferences and the narrowing affordability gap between the two categories. In 2024 the ratio was 53% highlighting used segment dominance, and in 2026 it is more than 54% showing the new segment dominance.

Henry Botha, Head: Strategy and Business Analytics at Absa Vehicle Finance, says: “South Africa’s younger consumers remain highly value conscious, but we are seeing growing confidence in the new vehicle market. While affordability remains the primary consideration, improved access to finance, attractive manufacturer incentives and a broader range of competitively priced entry-level models are encouraging more young consumers to consider new vehicles.”

The findings further reveal a strong preference for financing structures that support affordability and manageable monthly repayments. More than 90% of younger customers opt for repayment periods exceeding 72 months on both new and pre-owned vehicles, reflecting ongoing pressure on household budgets and a heightened focus on cash flow management.

Affordability is also influencing vehicle choice. In the pre-owned market, younger customers are typically purchasing vehicles that are, on average, four years older than new models, with 2024 and 2025 model-year vehicles accounting for the largest share of financed purchases.

The R200,000 to R300,000 price range remains the sweet spot for Millennials and Generation Z vehicle buyers. This segment accounted for approximately 35% of new vehicle applications and 37% of used vehicle applications, highlighting continued demand for value-driven mobility solutions.

The popularity of affordable, value-driven brands continues to shape purchasing decisions. In the new vehicle category, the Omoda C5 emerged as the top-selling model among young buyers, followed by the Hyundai Grand i10, Haval Jolion Pro, Chery Tiggo 4 Pro and Volkswagen Polo Vivo. In the pre-owned segment, the Volkswagen Polo Vivo led sales, ahead of the Volkswagen Polo, Suzuki Swift, Renault Kwid and Hyundai Grand i10.

“The current economic environment continues to influence consumer decision-making,” added Botha. “Although the cost of living remains elevated, younger consumers are becoming increasingly strategic in balancing vehicle ownership with broader financial commitments. They are carefully weighing affordability, long-term value and monthly repayment obligations before making purchasing decisions.”

The findings reveal that affordability remains the primary driver of purchasing decisions among younger consumers. Some 43% of customers fall within the lower-middle income segment, earning between R20,000 and R40,000 per month, while a further 34% earn below R20,000. This highlights the extent to which Millennials and Generation Z are prioritising cash flow management and financially sustainable credit choices as household budgets remain under pressure.

“The strong growth in new vehicle purchases signals improving consumer confidence and growing appetite for vehicles that offer the latest technology, safety features and warranty benefits.” said Botha.

“We expect both the used and new vehicle markets to remain resilient, supported by consumers' ongoing need for mobility and a continued focus on affordability. As economic pressures and interest rates continue to shape household finances, consumers are becoming more intentional about their purchasing decisions and seeking finance structures that support sustainable vehicle ownership. We encourage customers to maintain strong financial discipline and carefully assess affordability to ensure their vehicle finance choices remain aligned to their long-term financial wellbeing. Lastly, customers should consider paying down their vehicle finance faster where possible. Building positive equity, where the vehicle is worth more than the remaining balance, can help unlock a deposit for their next purchase and support a stronger financial position over time,” Botha concluded.