Millennials, Gen-Zs want cars, but are struggling to afford them – WesBank

15th April 2024 By: Irma Venter - Creamer Media Senior Deputy Editor

Millennials, Gen-Zs want cars, but are struggling to afford them – WesBank

Young South Africans, aged 35 and younger, are demonstrating a growing preference for private mobility.

This is evident in recent WesBank data that shows a consistent increase over the past three years in the number of vehicle finance applications for new and pre-owned cars by Millennials and Gen-Zs.

This upward trajectory was tracked from 2021, when 722 505 vehicle finance applications were received from young people aged 35 and younger.

This number increased to 806 458 in 2022, and 826 088 by 2023.

“This is contrary to previously held views by industry experts who suggested that a desire for private car ownership would wane amongst Millennials and Gen-Zs in favour of alternative forms of transport, such as e-hailing services,” says WesBank marketing and communications head Lebo Gaoaketse.

“Vehicle purchases among this age group have, however, indeed slowed down, as reported in 2023 by data analytics firm Lightstone, which noted that those under 35 accounted for 39% of new car purchases in 2012, but only 31% in 2022.

“Viewed in conjunction with WesBank’s vehicle finance applications data, though, it becomes clear that the subdued sales are not a result of diminished desire for personal cars, but rather a symptom of a depressed economy and strained affordability across all age groups, including Millennials and Gen-Zs,” says Gaoaketse.

To stimulate sales, manufacturers, dealerships and finance houses have ramped up their incentive programmes in recent times by offering discounts, alternative finance structures and extended loan terms to ease the load carried by consumers seeking to purchase a car.

“For recent graduates, for instance, who might not have a credit history, WesBank introduced a graduate finance programme, which grants young people access to vehicle finance despite not having a credit record,” notes Gaoaketse.

“However, more needs to be done to help young South Africans attain their aspiration for safe and reliable private mobility, which in many cases can also be a key consideration for a successful job application.

“It may also be necessary for those seeking vehicle finance to consider more affordable alternatives in the pre-owned space or among value-oriented importers that have recently entered the local market,” he advises.