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Average interest rate on vehicle finance in South Africa currently ranges from about 9% (new cars) to 20% (used cars). For new vehicles, expect around 9%–15%, with 11%–12% common.
Used cars see higher rates—typically 10%–20% depending on credit worthiness, deposit, lender, and term.
What determines this average rate?
Driving factors include:
- Prime lending rate: Currently 11.75%, guiding baseline interest
- Type of vehicle: New cars attract lower rates than used
- Credit score: Higher credit scores—under 670 is fair, 700+ is better—lower the spread
- Loan length: Longer terms cost more in interest overall
- Deposit size: Larger deposits reduce principal and risk
- Risk factors: Lenders price higher for low-credit profiles
Good vs average interest rates
- New Car: 9%–12% is a solid range; sub-9% deals for prime customers
- Used Car: 11%–15% – anything under 10% is rare and excellent
- Below PAR deals: Bank deals like 9% on new cars indicate competitive lending
Fixed vs variable rates
- Variable rates tie to prime: 11.75% ± spread; monthly payments shift when SARB changes rates
- Fixed rates remain constant, making budgeting stable in fluctuating economic conditions.
Most vehicle finance contracts in SA use variable, though fixed options do exist.
True cost of average rate
A 0.25% prime rate cut may reduce a R500,000 car’s monthly payment by about R63. Over 60 months, saved R3,780—and long term interest saved too.
But if your rate is high—near 15.4%—you’ll pay significantly more than at average rates like 11.75%.
How to qualify for a better-than-average rate
- Boost your credit score above 670
- Shop around multiple banks or dealers
- Use shorter loan terms (24–48 months)
- Provide a solid deposit (10–20%)
- Consider refinancing if rates drop after purchase
Real-world examples
- A R410,000 new car financed over 60 months at 15.4% costs R8,448/month—over R750 more monthly than at 11.75%
- Used car buyers may sample 14%–18%, especially with weak credit or small deposits.
Current outlook for 2025
Expect prime-linked rates to slowly ease if SARB rate cuts continue. Average rates may drop toward 9%–10% range for creditworthy buyers. But inflation or global headwinds could keep them high.
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Final thoughts
Average interest rate on vehicle finance in South Africa is currently around 11%–12% for new vehicles, rising to 15%+ for used, depending on borrower profile. Getting closer to 9% means strong credit, decent deposit, or shorter terms. Choose wisely: a small rate difference can mean big savings over your loan’s duration.
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