Absa Vehicle and Asset Finance (AVAF) says consumers aged 18 to 35 – Millennials and Generation Zs – have year-to-date accounted for 40% of all new-vehicle finance applications and 45% of used-vehicle finance applications.

This translates 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, indicates AVAF data.

New-vehicle purchases in this demographic increased by 57% between 2024 and 2025, and grew by a further 32% between 2025 and 2026.

In the same vein, used-vehicle purchases increased by 32% between 2024 and 2025, followed by a more moderate 18% increase between 2025 and 2026.

This is a significant market shift, notes AVAF. Historically, younger buyers have favoured pre-owned vehicles because of their lower purchase prices and financing costs.

However, this year marks a clear inflection point, with demand for new vehicles surpassing demand for used vehicles.

The ratio of new-to-used vehicle purchases continues to rise, reflecting changing consumer preferences and the narrowing affordability gap between the two categories.

“South Africa’s younger consumers remain highly value conscious, but we are seeing growing confidence in the new-vehicle market,” says Absa Vehicle Finance strategy and business analytics head Henry Botha.

“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.”

AVAF data further reveals 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, possibly reflecting ongoing pressure on household budgets and a heightened focus on cash-flow management.

Affordability is also influencing vehicle choice.

A price range of R200 000 to R300 000 remains the sweet spot for Millennials and Generation Z vehicle buyers, AVAF data shows.

This segment accounted for roughly 35% of new-vehicle applications and 37% of used-vehicle applications, highlighting continued demand for value-driven mobility solutions.

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,” notes 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 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, adds 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.”