January is a month of new beginnings. New jobs, promotions, university acceptances, and relocations often come with longer commutes. For many South Africans, these transitions share a common need: reliable transport.
And the used car market is where these stories often start. And 2026 is shaping up to be an interesting year for buyers navigating this space. Understanding what drives prices means looking beyond the sticker on the windscreen.
After reaching a peak of 11.75%, the prime interest rate has dropped to 10.25% following cuts of 150 basis points since September 2024. Vehicle inflation hit a record low of 1.5% in 2025, the lowest since 2008.
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Used-to-new ratio goes up
TransUnion data shows that used-to-new vehicle financing ratios climbed to 1.56:1 in the fourth quarter of 2024, up from 1.23:1 the previous year. Nearly half of all pre-owned purchases are now financed, with an average ticket size of R396 000.
What this means for buyers is that if you plan carefully and budget responsibly, this can be a good time to enter the used car market.
“The used car market does not operate in isolation from new vehicle sales. When new car sales grow, as they did dramatically in 2025, reaching 596 818 units, the highest since 2015, it creates a ripple effect that can positively affect the used vehicle market,” says Lebogang Gaoaketse, Head of Marketing and Communications at WesBank.
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Supply of used cars increases
More new cars eventually mean more trade-ins, which should increase the supply of used cars and moderate prices. However, consumers are keeping vehicles longer, now six to eight years on average, which limits the availability of low-mileage, well-maintained cars in popular segments.
Body type trends are also shaping values. SUVs and crossovers now make up over 50% of the passenger vehicle market, up from 45.2% four years ago. Three-year-old compact SUVs often command a premium over similarly aged sedans, even with comparable mileage and condition.
The three-to-five-year-old used cars segment remains the sweet spot for value. Vehicles in this band commanded 44.25% of the market in 2024, representing the point where cars have absorbed the steepest depreciation while still offering modern features, remaining warranty coverage, and manageable mileage.
Financing options have also evolved, with more flexible terms and products tailored to different buyer profiles.
Big year predicted
Looking ahead, several factors will shape the market this year. Stable or easing interest rates should support continued financing activity. Naamsa forecasts nine to 11% new vehicle growth in 2026, which could create more trade-ins later in the year, increasing quality used stock availability.
Interest in new energy vehicles is growing, with approximately 36% of prospective buyers showing a preference for hybrids. As more electric and hybrid vehicles enter the market, this will gradually influence used vehicle availability, pricing, and buyer decisions. Infrastructure improvements, particularly in electricity supply, will affect consumer confidence in this segment.
The bottom line for consumers is that preparation and patience pay off. Whether you are a graduate buying your first car, a family upgrading for growing needs, or seeking a reliable commuter, the opportunity exists. The difference between a smart purchase and a regrettable one often comes down to research, budgeting, and knowing what you are buying before stepping onto the used cars dealership floor.
