Chinese brands are putting more people into new cars, but insurance cover and the rules for electric vehicles are not keeping pace, new research from My Brand Group shows.
South Africans are buying new cars at a pace not seen since 2014, with Chinese new cars experiencing an exponential increase in new vehicle sales and consumer support.
Four reports undertaken by the Africa Centre for Evidence at the University of Johannesburg, on behalf of My Brand Group and Digicall, draw on interviews with 11 senior figures from insurers, manufacturers, one of the leading repair group, an industry association and a vehicle data provider. From the findings, the message is clear: the boom is real, and the technology in affordable cars and new energy vehicle penetration is reshaping industries tied to the auto sector. But the findings also warn of risks due to the current economic climate, placing the risk on drivers..
A boom on borrowed time
New passenger vehicle sales grew 15.8% year on year in the second quarter of 2026, against projected economic growth of about 1.2%. Chinese brands, with 22.4% of new passenger and light commercial sales, are driving much of that growth by putting first-time buyers into new cars rather than used ones.
The boom is mainly sustained by stretching finance and larger balloon payments than ever seen. TransUnion’s data estimated that more than half of vehicle finance now runs beyond 72 months, against a former norm of about 60 months.
The unintended consequences are that longer vehicle finance leaves owners exposed to many risks. The Reserve Bank has raised rates twice this year, and each 25-basis-point increase adds the car loan repayment. One informant warned that a shock could turn vehicles into “dead assets overnight” if buyers fall behind.
Financed, but uninsured
Insurance is a condition of vehicle finance, yet about 65% of South African motorists are estimated to be uninsured. An unpublished industry study shared with the researchers puts the share of financed vehicles with no insurance at 45%, and finds that a third of financed buyers cancel their cover within six months. It is not yet clear where the concentration of the uninsured falls.
“There’s a greater likelihood that you will be in an accident with somebody that is uninsured than with somebody that is insured,” said the research director at the data provider.
With no compulsory third-party property damage insurance in South Africa, insured drivers often pay for their own repairs after a collision with someone who is not covered. The research director argued that the gap is partly about perceived value rather than affordability, and that even third-party cover reduces the risk. That cover typically costs R180 to R450 a month, against R800 to R1,500 for comprehensive. Insurers interviewed back compulsory cover, yet the manufacturers’ association opposes it.
The findings also show that long loans also create a settlement gap. Insurers pay out a written-off car’s market or retail value. An owner can still owe the bank more than the insurer pays. Credit shortfall cover bridges that gap for roughly R50 to R110 a month, but it is optional and often misunderstood.
Electric cars: lower fire risk, open questions
The second report turns to new energy vehicles. South Africa sold 18,945 in the first eight months of 2026, about one in 20 new vehicles and more than in all of 2025, with Chinese brands leading.
International evidence is more reassuring than industry instinct. US data put fires at about 25 per 100,000 electric vehicles against 1,500 per 100,000 petrol and diesel vehicles, and Canadian data show they are written off less often.
The difficulty comes after a crash. “We don’t know how to store them. We don’t know how to write them off,” said a motor procurement executive at one of the country’s leading insurers.
The battery makes up 30% to 50% of an electric vehicle’s value. Yet South Africa has no independent battery valuation service. A damaged pack is valued on the manufacturer’s figure. A battery health certificate, proposed by a Chinese manufacturer and being developed as an industry standard, would give insurers, buyers and sellers an independent measure. The manufacturer says batteries are designed to last 15 to 20 years, well beyond a typical eight-year warranty.
What it means for drivers
Before signing, buyers should look at the full monthly cost of a car, including insurance, fuel and servicing. They should treat a loan of more than six years with a large balloon as a real risk of owing more than the car is worth. Anyone with finance should ask whether they need credit shortfall cover.
Electric and hybrid buyers should ask how the battery will be valued after an accident and who can repair the car, since parts often have to be coded by the dealer. Drivers who rely on driver-assistance features should know that South Africa has no legal framework yet for deciding who is liable when the car, rather than the driver, makes the mistake.
Policy will also reach consumers’ pockets. Tariffs of up to 50% on vehicles from China and India, now under consideration, would protect local manufacturing but push up prices at the cost of mobility ownership.
Rounding out the series, report three of the My Brand Group Rainbow Dragon Report, titled Pricing in The Dark, addresses data scarcity, safety technology, and the information gap between manufacturers and insurers. Report four, titled The Hidden Repair Bill, addresses write-offs, parts, warranties, and the strain on South Africa’s repair ecosystems. Both are made available for download. My Brand Group | Vehicle Replacement Specialists South Africa
Professor Isaac Khambule
Director of the Africa Centre for Evidence, University of Johannesburg South Africa
