It is really no surprise that more and more cars are being repossessed in South Africa. The current economic climate is causing more and more people to be unable to afford making repayments on their cars. Wesbank, South Africa’s largest vehicle financier, said on Wednesday (16 July) it repossessed nearly 2 000 vehicles per month as at June 2008, compared with just over 1 000 vehicles the same time last year. That is double the amount. In June this year, Wesbank repossessed 1 806 vehicles - up sharply from 1 061 vehicles in July last year.

The rising interest rates have been one of the major reasons for this hike in the rate of repossessions, coupled with the rising fuel prices. If one were to go to the car auctions today, you would see hundreds of cars up for auction. It is estimated that there could be up to 6000 cars being repossessed a month in South Africa. Those in the market to buy a car could get a better deal going to the auctions of these repossessed cars rather than going to a dealership. But the prices will not be drastically different, maybe just slightly lower at the auction than the dealership.

Market analysts think that this current high rate of repossessions will not remain as it is and fewer repossessions will start to take place hopefully towards the end of the year as consumers get to grips with ways of servicing their debt. This also largely hinges on how the interest rates in South Africa shape out. The motor vehicle industry is currently going through a tough patch as consumers are buying fewer and fewer cars, with some in the motor industry saying, “This is the most difficult period we have ever experienced.”

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