Chinese cars now make up 40% of SUV loan applications. The banks are nervous about one thing

40%. That is how many SUV finance applications at Absa are now for Chinese brands, up from 19% in 2023.

Absa's car finance arm released the figure on 8 October, through Cars.co.za's yearly report. "SUVs continue to gain momentum," says Charl Potgieter, who runs Absa Vehicle and Asset Finance. He puts it down to competitive pricing and the fast growth of Chinese brands.

At WesBank the share is even higher, and the bank's own boss says that worries her.

How many Chinese cars do South African banks finance?

A lot more than they did three years ago. In September, FirstRand CEO Mary Vilakazi said six out of every 10 vehicles WesBank finances are Chinese brands. FirstRand owns WesBank, and also FNB, the bank behind some of this month's other money headlines.

Chinese brands such as Haval, Chery, Omoda, Jetour and BAIC sold about 10% of new cars in South Africa in 2021, says Business Day. By 2025 it was more than 20%. This table pulls every bank and market number into one place, with the date each was true.

19.00%2023

40.00%2026

See the numbers

2023	19.00%
2026	40.00%

Source: Absa Vehicle and Asset Finance, via TopAuto (8 Oct 2026)

Why are banks worried about Chinese cars?

Because nobody knows what a five-year-old Chinese car will sell for. Not many of them have reached that age here yet.

"We are worried about what is going to happen to the used vehicles market when the time comes for consumers to have to sell them," Vilakazi told Business Day. She says car prices in South Africa have come down "structurally" because of the new competition. A buyer with R400,000 to spend has far more choice than three years ago.

That matters because of how a car loan works. The car is the bank's security. If you stop paying, the bank takes the car back and sells it. If the car fetches less than expected, the bank loses more.

How much has this cost WesBank?

The numbers sit in FirstRand's 2026 annual report, as reported by BusinessTech. In the year to June 2026, profit in WesBank's retail car finance business fell 35% to R1.016 billion. That happened even though new car loans grew 18%.

Bad debt costs rose 26% to R2.604 billion. WesBank's overall normalised earnings fell 20% to R1.394 billion.

Part of the hit is a special extra provision. In bank language, it is a "judgemental management out-of-model adjustment" for the risk on used car prices. Put simply, WesBank's normal models could not see the risk, so managers set money aside by hand. It blames "new lower-priced entrants" to the market.

Its fleet leasing side is already feeling it too. WesBank says it reflects weaker used car prices after more new cars and cheaper brands arrived.

Photo: Ethan Llamas / Wikimedia Commons, CC BY-SA 4.0

Do Chinese cars lose value quickly?

So far, the early numbers are better than the horror stories. AutoTrader found the Chery Tiggo 4 Pro and Haval Jolion kept about 70% to 75% of their price after three years. Our full guide to Chinese car reliability and resale has the brand-by-brand numbers.

The big test is still coming. Jebb McIntosh, CEO of dealer group CMH, says its rental fleet sold 15 to 18 month old cars at good prices. But he told shareholders the resale value of large numbers of five to six year old cars "has not yet been tested".

There is also more supply than demand. Cars.co.za says Chinese stock on its site has grown fast, but buyer demand "is not scaling as fast".

Quality questions do not help. Stories like the Chery SUV whose rear axle ended up on a road in Malaysia do not help either. Used car buyers remember them.

What does this mean for my deposit and monthly payment?

You may be asked for more upfront on some models. Lender Spring Loans says banks look at your income and credit record, not the badge. But a weaker resale value can change the loan-to-value ratio, which is how much the bank lends compared with what the car is worth. A lower ratio means a bigger deposit.

Here is a simple example with round numbers. Say you buy a R400,000 SUV. If it keeps 70% to 75% after three years, it is worth R280,000 to R300,000. If it only keeps 60%, it is worth R240,000. That gap is R40,000 to R60,000 off your trade-in.

A balloon payment makes this sharper. A balloon is a lump sum you still owe at the end of the loan, which keeps the monthly payment low. A 30% balloon on R400,000 is R120,000. The whole plan assumes your car will be worth more than that on the day it is due.

If it is worth less, you have negative equity. That means you owe more than the car is worth. Spring Loans warns that if you default, the bank can take the car and still come after you for the shortfall.

Will this affect my car insurance?

It can. If your car is stolen or written off, insurers usually pay out what the car is worth on the market, not what you still owe the bank. When used values fall, that gap can grow. Some buyers add shortfall cover for exactly this reason. Ask your insurer how they value your model before you sign.

Photo: Alexander-93 / Wikimedia Commons, CC BY-SA 4.0

Why is my Toyota or VW worth less now?

Vilakazi says competition in new cars has pushed down the price of second-hand cars. People who would have bought a three-year-old Toyota or VW are buying a brand new Chinese SUV instead.

McIntosh puts it this way. Used car prices normally rise with new car prices. With new car prices flat, owners are holding on to their cars longer, "until the resale value and finance debt align". In other words, people are waiting until they no longer owe more than the car is worth.

TransUnion's figures show the shift. Chinese brand sales jumped 72% in the second quarter of 2026, to 22.4% of new passenger and light commercial vehicle sales.

What does this mean for WeBuyCars?

It has been a rough year. WeBuyCars, the country's biggest used car seller, told investors it had to cut the prices of cars competing with new Chinese models "to maintain liquidity", which means keeping cars moving off the lot.

Its share price fell from R57.93 to R32.50 in the year to July 2026, a drop of 43.9%, Daily Investor reported. Its cars were also taking longer to sell, 33.2 days on average, up from 28.9. By 9 October 2026, the share traded at R26.25. That is less than half its price a year earlier.

Not everyone is gloomy. Market commentator Simon Brown told Daily Investor that Chinese cars are a short-term headwind. Once they age, he says, they become stock for WeBuyCars to sell.

Photo: Husskeyy / Wikimedia Commons, CC BY-SA 4.0

Are banks still saying yes to Chinese cars?

Yes, every day. WesBank says its deals with Chinese brands and their dealers helped grow its loan book. Absa's SUV figures show the same rush. Buyers have more choice than ever, as Vilakazi herself points out.

The banks have already priced the risk in, with bigger provisions and closer looks at loan-to-value. The buyers who do the same sums before they sign walk in with the best deal. Look at the deposit, the size of any balloon, the insurance payout and the trade-in plan in year five.

The six-in-ten number tells you where South Africa is going. The car you drive home is the bank's security for years. Know what it could be worth on the last day of the loan, and you know more than most people in the showroom.