The South Africa Used Car Market 2025 is booming—but not for reasons buyers will be happy about. A new CO2 emissions tax on new vehicles has pushed prices up across the board, making second-hand cars more attractive than ever.
For families, businesses, and first-time buyers, the choice is clear: skip the tax-heavy new models and head straight to the used market. But this sudden demand is also driving up prices of pre-owned vehicles.
So, what exactly is the CO2 tax, how much are prices rising, and which used models are now most in demand?
What Is the New CO2 Tax in South Africa?
In January 2025, the government expanded its climate policy by introducing stricter CO2-based taxes on new vehicle sales.
-
Cars emitting above 120 g/km now carry extra tax charges.
-
SUVs and pickups, which emit more CO2, are the hardest hit.
-
EVs and hybrids are exempt, making them attractive alternatives.
This tax aims to push automakers and buyers toward greener options, but in practice, it’s driving consumers toward the used market.
How Has the CO2 Tax Impacted New Car Prices?
The effect was immediate.
-
Small Cars: New prices rose by R20,000–R30,000.
-
SUVs and Pickups: Prices increased by R50,000–R80,000.
-
Luxury Vehicles: Some models now cost over R100,000 more due to emissions penalties.
For many South Africans, these hikes are simply unaffordable, pushing them to buy used instead.
How Much Have Used Car Prices Increased?
The shift in demand has raised used car values sharply.
-
Compact Hatchbacks (VW Polo, Toyota Starlet): Up by 15% year-on-year.
-
Popular Sedans (Toyota Corolla, Honda Civic): Up by 20%.
-
SUVs and Pickups (Hilux, Fortuner, Ranger): Up by 25–30%.
Some models are now selling for nearly the same as brand-new prices—without the tax burden.
Which Models Are Most in Demand?
Certain cars dominate the used market in 2025.
-
Toyota Hilux and Fortuner: Remain South Africa’s strongest resale models.
-
VW Polo: The most sought-after hatchback thanks to reliability and efficiency.
-
Ford Ranger: A favorite among business owners avoiding new CO2 surcharges.
-
Toyota Corolla Cross Hybrid: Popular as a fuel-efficient, tax-friendly option.
Even older models with higher mileage are selling fast, as buyers rush to avoid higher upfront costs.
Why Are Businesses Choosing Used Over New?
Businesses running fleets are particularly sensitive to rising prices.
Logistics firms and construction companies often rely on pickups and SUVs, which are heavily penalized under the CO2 tax. Buying used avoids the extra cost, keeping fleet budgets manageable.
This has led to bulk purchases of pre-owned Hilux and Ranger models, driving demand and prices even higher.
Are EVs and Hybrids Changing the Market?
Yes—but slowly. EV adoption is growing, especially in urban centers like Johannesburg and Cape Town.
However, EVs remain too expensive for most buyers, even without CO2 tax. Hybrids like the Toyota Corolla Cross are gaining popularity because they offer lower emissions without the high upfront cost of EVs.
The used EV market is still small but expected to expand in the next 2–3 years.
How Does This Affect First-Time Car Buyers?
First-time buyers are the most affected. With higher prices for both new and used cars, many young professionals are delaying purchases.
Some are shifting to smaller hatchbacks or even motorcycles. Others are turning to financing options that spread payments out, though interest rates remain high in 2025.
The dream of car ownership is becoming harder to reach for many South Africans.
What Should Buyers Watch Out for in the Used Market?
With prices soaring, buyers must be extra cautious.
-
Check Vehicle History: Ensure no major accidents or hidden issues.
-
Beware Overpricing: Some sellers are inflating prices beyond fair value.
-
Consider Mileage: Lower mileage cars are holding premiums, but high-mileage bargains may not be worth it long-term.
-
Use Trusted Dealers: Certified pre-owned programs provide peace of mind with warranties.
Smart buying decisions are essential in today’s competitive market.
Will Used Car Prices Keep Rising?
Analysts believe the surge will continue through 2025. As long as the CO2 tax remains, demand for used cars will stay strong.
However, if EVs become cheaper and more available, the market could balance out by 2026–2027. For now, the upward trend shows no signs of slowing.
Conclusion
The South Africa Used Car Market 2025 is a story of supply, demand, and government policy colliding. The CO2 tax on new cars has made used vehicles the cheaper alternative, but soaring demand is pushing second-hand prices to record highs.
For South Africans, the choice is difficult—pay the tax on a new car or fight rising prices in the used market. Either way, smart shopping, careful financing, and choosing fuel-efficient models are the keys to surviving the auto landscape in 2025.
FAQs
What is the CO2 tax in South Africa?
It’s a new tax on cars emitting above 120 g/km of CO2, making new high-emission cars more expensive.
How much have used car prices gone up?
By 15–30%, depending on the model, with SUVs and pickups hit the hardest.
Which used cars are in demand?
The Toyota Hilux, VW Polo, Ford Ranger, and Toyota Corolla Cross Hybrid lead the market.
Are EVs exempt from the tax?
Yes, EVs and hybrids are exempt, but their high cost limits adoption.
Will prices keep rising?
Yes. Analysts expect used car prices to climb through 2025 before stabilizing.
Click here to know more.