Car prices do not remain the same all year long and there are times when it is better to buy a car than in other months.
Buying a car in South Africa is a little easier now than it was a year or two ago, thanks to stable fuel prices, lower interest rates and moderate inflation.
The current conditions are particularly favourable for drivers who plan to finance used cars, drive lots of kilometres, or upgrade their wheels, Ernest North, co-founder of insurance platform Naked Insurance, says.
“Consumers are finally seeing some relief from the supply chain disruptions, rapidly rising car prices, and high interest rates that caused car ownership costs to spike as we came out of the pandemic.
“There are a few gentle tailwinds contributing towards increased affordability as we exit 2025. The prime interest rate is down to 10.25% after reaching a high of 11.75% in mid-2023. That translates into noticeably lower repayments for vehicles bought using vehicle financing.
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Lower inflation and fuel prices made it cheaper to own a car
“In addition, inflation decreased to around 3.4% to 3.5% for the second half of 2025, compared to an average of 6% in 2023. This means that prices for maintenance, services, insurance and other aspects of car ownership are not increasing as quickly as they were two years ago.
“The fuel price also remained relatively flat in real terms over the past year, with official inland 95 unleaded prices at R21.30/litre in November 2024 compared to around R21.12/litre in November 2025.”
North points out that another factor making a big difference is a slowdown in car price inflation. The TransUnion Vehicle Pricing Index showed that new-car prices increased by 7% and used-car prices by 9.1% year over year in the fourth quarter of 2023. More recent data reflects below-inflation price increases for new and used vehicles alike.
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This is the difference a year makes in buying a car
He uses these two scenarios to highlight the impact of reduced inflation and lower interest rates for car buyers:
- If you use a loan to buy a used hatchback for R280 000: A one percentage point reduction in the interest rate will cut your monthly repayment by enough to reduce your monthly cost-of-ownership by 2-3% compared to a year ago, even if you have to include the effect of services, parts and insurance increasing at the rate of inflation.
- You are a heavy driver doing 2 500 kilometres a month: If your income increases at the rate of inflation and the petrol price stays flat, your petrol is cheaper compared to what you earn. If your car gives you 100 kilometres per eight litres, you will be spending R4 224 per month on petrol now, compared to R4 260 a month a year ago.
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Is a pre-owned car a good value for money?
North says conditions are favourable for used car buyers now because prices are not increasing as quickly as they were in 2022 and 2023.
“Car prices were even actually decreasing in recent months, when used car prices were falling.
“Many car buyers find that getting a used car between one and three years old to be a sweet spot. This lets you buy a car with new technology, which may still be under a warranty and have a service plan, but at a more affordable cost than a new vehicle.”
He says consumers must also keep in mind that when a new car is sold, its value usually drops the fastest in the first year.
“The moment it is registered and driven, it is no longer new. Buying a used car allows you to avoid that steep depreciation.
“Buying a pre-owned vehicle can therefore deliver the best value-for-money, as long as you do your research. Consider a certified used car from a reputable dealer.”
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Buying a car privately also a good idea, but no CPA protection
You can also often get a great deal when buying privately, but you will need to do a lot of extra homework, such as verifying the service history, getting an independent inspection, matching the VIN to the paperwork, checking for outstanding finance or theft flags and making sure that the sale and payment are done safely and in writing.
Consumers must also remember that a private sale is not covered by the consumer protection offered in the Consumer Protection Act, such as the implied warranty that lets you return the car for a refund under certain circumstances within the first six months if it has a latent defect.
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Why is January a good time to buy a car?
North says many drivers who consider a vehicle upgrade find December and January to be good months to change cars. In December, some dealers push hard to meet targets and clear stock. This means you can often negotiate a discount or extras.
In January, he says, dealers are keen to move cars off their floors before the new models arrive and may be hungrier for business because showrooms are quieter.
“If you are leaning towards buying, treat December and January’s better deals as a bonus and not a reason to buy a car you do not really need or cannot afford.”
North has these final tips for car buyers:
- Think about the full cost of owning the car, not just the monthly repayment. Budget for insurance, fuel, tyres, services and unexpected repairs.
- Do not stretch yourself too far to get a high-status car. Remember that petrol prices or interest rates could go up again without much warning.
- That older used BMW or Merc might seem prestigious, but think carefully about the costs of service and maintenance as the car ages.
- Set an honest budget for yourself and then see what you can afford. This helps you to avoid the trap of getting your heart set on something that is actually too pricy for your budget.
- Get insurance quotes before you buy because insurance costs can vary significantly between models.
