Bheki Mahlobo, Economics and Policy Editor at The Common Sense, cautions that the rising cost of living and stagnating real incomes mean households should pay off car-loan debt as a matter of urgency, with interest rate risk and household vulnerability at the fore.

“Consumers need to prioritise paying off their car loans wherever possible,” Mahlobo says. “Vehicle finance carries long repayment terms and is often structured with residual values or balloon payments that can trip up even diligent payers when economic conditions tighten.” South Africa’s household debt ratio remains among the highest in emerging markets, and the rising costs of essentials mean less money left over for monthly instalments. “With inflation still biting and little prospect of substantial interest rate cuts ahead, the risks to car owners are real,” Mahlobo warns. “A sudden financial shock, such as a job loss, could quickly turn a car-loan from a manageable expense into a repossession risk.”

He stresses that clearing this form of debt not only saves on interest but shields households from future shocks. “Paying off your car early is one of the most effective steps a household can take to build financial resilience in tough times.” Two decades of economic data confirm that those with lower personal debt weather downturns best. This advice provides a lens for managing financial risk in a turbulent economy. Financial stability starts with practical, forward-looking choices.