Interest rate relief is expected soon in South Africa, and the forecasted cutting cycle could have a positive material impact on car owners with loan repayments.
The South African Reserve Bank is expected to cut interest rates by up to 150 basis points by mid-year 2025, which could result in the average car owner with vehicle asset finance saving R308 per month on their repayments.
Looking ahead, the Bank of America expects 25 basis point cuts to begin in January 2025, followed by cumulative cuts of 100 basis points in January, March, May, and July.the cutting cycle will conclude after a 150 basis point reduction, possibly around the middle of 2025 at the July meeting .This maximum forecast of 150bps will bring much-needed relief for car owners with loans in South Africa, and it’s expected to commence as soon as November.
For instance, those who bought an R500,000 car will pay R375 less per month, while those who purchased a R1 million car will enjoy a more substantial reduction of R750 per month. “Vehicle price inflation, high interest rates, and the general rising costs of living are all impacting the ability of new car buyers to enter or stay in the market,” said Lebo Gaoaketse, Head of Marketing and Communication at WesBank.
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