Declan Jones | Head | Vehicle Ecosystem Development | WesBank | mail me |
South Africa’s economic landscape is challenging even the most resilient consumers. In recent years, high inflation and soaring interest rates have taken a toll. At the same time, stagnant economic growth, rising fuel prices and a weaker rand are putting tremendous pressure on household finances.
To add to the squeeze, the cost of debt keeps climbing. Consumers’ creditworthiness is consistently deteriorating.
According to the South African Reserve Bank, the country’s household debt-to-income ratio reached 62.0% in the fourth quarter of 2024. This means households owed 62 cents for every Rand of disposable income.
Moreover, Prism scores, a predictive credit scoring model used by South African lenders to gauge the likelihood of a consumer defaulting, have been in consistent decline for several years. These scores reflect individual credit behaviour, including payment history and debt levels. Adding to the pressure, credit application decline rates are at record highs. This points to a growing segment of the population being locked out of traditional finance options. Rethinking mobility in this economic context is no longer optional. It is essential.
Rethinking mobility – the cracks in the traditional model
For many years, traditional vehicle finance models served a growing middle class well. But today, affordability is under significant strain. Consumers now face mounting barriers to entry, including tougher approval conditions and larger deposit requirements.
High monthly instalments, often driven by vehicle prices increasing faster than inflation, are pushing cars further out of reach. The consistent decline in credit quality highlights a growing disconnect. Vehicle prices are rising while disposable incomes are not keeping up.
The result is a squeeze on mobility. This affects not only personal freedom but also economic participation. Without access to affordable vehicle solutions, many South Africans lose out on opportunities for work, education, and entrepreneurship. Rethinking mobility means recognising that these losses affect society as a whole.
Global trends offer direction for rethinking mobility
Around the world, financial institutions are reimagining what vehicle ownership looks like. Subscription-based models, flexible leasing, usage-based finance and shared mobility financing are gaining traction. This is particularly evident in mature economies facing similar economic challenges.
Countries like the United States, parts of Europe, and increasingly regions in Asia are embracing flexible finance options. These models de-emphasise ownership and focus instead on access, convenience and flexibility.
For example, a recent PwC study in the UK showed that 49 percent of consumers would prefer a subscription-based model. They chose this over traditional purchasing or financing options when acquiring a vehicle.
Deloitte’s 2025 Global Automotive Consumer Study supports this trend. While daily car usage remains high in places like India, Southeast Asia and the USA, sentiment is shifting.
A significant portion of 18 to 34-year-olds across multiple markets expressed interest in mobility-as-a-service alternatives. These consumers are moving away from conventional ownership in favour of more flexible, usage-based solutions. Clearly, rethinking mobility is a global movement and South Africa must not be left behind.
The regulatory conundrum in rethinking mobility
In South Africa, regulatory frameworks have not kept pace with these global shifts. The National Credit Act, although vital for consumer protection, is designed around traditional credit models.
Subscription and usage-based finance options resemble service agreements more than credit agreements. This places them in a regulatory grey area that makes them harder to scale. Furthermore, regulators are tightening affordability assessments in response to rising consumer indebtedness. This could make traditional vehicle finance even less accessible to many South Africans.
Without regulatory innovation to match financial innovation, the country risks entrenching inequality in mobility access. That in turn directly contributes to broader economic exclusion.
The opportunity for innovation
There is a clear opportunity and a responsibility for the finance sector to drive alternative solutions. Policymakers must support this effort. To move beyond traditional financing models, we need solutions with greater flexibility. This includes shorter commitment periods and the ability to change or return vehicles easily.
We must also sharpen our focus on affordability. That means shifting from ownership-based models to those that prioritise usage and access. Improving accessibility requires a re-evaluation of how creditworthiness is assessed. We need models that reflect real financial behaviours and resilience, rather than relying solely on historic credit scores.
The shift to alternative vehicle finance is not only an economic imperative. It is a social one. Mobility unlocks opportunity. It enables economic participation and strengthens the social fabric of South Africa.
If we want to keep South Africans moving forward, we must evolve how we think about vehicle finance. The economy may be tight, but innovation, collaboration, and regulatory foresight can help us open new roads. Rethinking mobility is not just a future goal. It is a current necessity.
