Pretoria - About 2 800 vehicles a month are being repossessed nationally by WesBank and Absa Vehicle and Asset Finance, the country's two largest vehicle finance providers.
However, both indicated that the current level of vehicle repossessions was off peak levels, while Absa said that there had been an improvement in payment arrears in the first two months of this year.
WesBank has a 33 percent share of the vehicle finance market and Absa 27 percent.
Brian Riley, the chief executive of WesBank, said it repossessed 1 800 vehicles nationally last month and expected repossessions to remain at this level for the next three months before "starting to tick down". WesBank had already noted a downturn in repayment arrears levels, but a repossession level of between 1 500 and 1 600 a month nationally "would be an acceptable figure for us".
He confirmed that WesBank's vehicle repossessions had been as high as more than 2 000 a month about five or six years ago, and as low as 1 000.
Marcel de Klerk, the managing executive of Absa Vehicle and Asset Finance, said its repossessions had averaged about 1 000 a month nationally between July and December, but had declined in the first two months of this year. In the passenger market, up to 25 percent of vehicles were bought for cash, and the balance was financed. A total of 714 340 vehicles were sold in South Africa last year, of which 481 577 were cars.
"Our highest repossession level was 1 096 and we're now way off that on our retail book. We're quite happy with the state of our book. In the industry, the long-term norm for bad debt as percentage of average advances is probably 1 percent. We're way off that norm."
De Klerk said vehicle repayment arrears rose 30 percent in the second half of last year. He stressed that this figure was skewed by the 15 percent growth in the market that needed to be taken out.
This meant arrears increased by between 10 percent and 15 percent in the second half of last year, but they were now back below this level for the first two months of this year.
Riley said WesBank had not tightened its credit criteria again since November last year.