Young South Africans are stretching their budgets to afford cars - youth barometer

Wendy Knowler focuses on the report's findings around the youth's car buying and financing trends, on The Money Show.

Buying your first car as a young person is a thrill, marking another step into independent adulthood.

It also comes with some hidden pitfalls.

For many young adults, a car is the first asset they buy before a property and then is then their catalyst into their first insurance purchase because banks require comprehensive insurance for finance, notes Wendy Knowler.

The consumer journalist takes a look at the car buying and financing trends revealed in Standard Bank's inaugural Youth Barometer Report, which examines how 18-35 year-olds are managing their finances.

Standard Bank says just under 40% of its vehicle finance clients fall into this age group.

While the report finds that young people in general are not being reckless but 'resilient and resourceful' around their finances, Knowler's not sure this applies to car purchases.

She cites factors like lack of experience, not knowing and understanding the impact of interest, and failing to get the car checked by a professional before purchase.

Standard Bank notes that unlike with housing finance, where there’s sometimes some co-signing or financial assistance from parents, it is extremely rare in vehicle finance, making this the first significant purchase they have to manage on their own.

Most also don't make a down payment - between January 2024 and May 2025, over 65% of youth who financed cars with Standard Bank did so without a deposit.

"Compared to customers over 35, youth are stretching their budgets to afford cars, Standard Bank says; particularly those in their early twenties, where earning potential is lowest, and car access is often a necessity."

Wendy Knowler, Consumer Journalist 

What makes her 'shudder', Knowler says, is that to keep their monthly payments manageable, many young people opt for balloon payment structuring.

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A balloon car payment deal cuts the monthly repayments of the car by a percentage, with the rest divided by a number of months, leaving you with a lump sum to pay at the end .

It's common for people not to think of factoring these outstanding balloon payments into their debt burden, which can get them into trouble.

Knowler generously extends an open invitation to car buyers to reach out to her before signing an offer to purchase (OTP).

"...and not AFTER they're saddled with a loan with too much interest and risk, extra insurance or security products they could have done without or sourced for much less on their own, admin fees they could have negotiated down."

Wendy Knowler, Consumer Journalist

"By law  they have five business days in which to get that quote checked out by experts... during which time it remains valid."

Wendy Knowler, Consumer Journalist

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