How much more you need to earn in 2017 to afford the same car you could last year

Research by analytics group Lightstone in 2016 showed the value of the car you could afford on your monthly salary in South Africa – this is how much more you would need to earn now to afford the same vehicles.

The research group did calculations on what cars you could afford based on your monthly salary, assuming 20% of the gross was paid towards the vehicle, financed over 5 years.

The same cars would likely feature in a similar break down of what could be afforded per income group – but a more interesting measure is how much salaries would have had to increase to keep up with car pricing over the past year.

Across 12 salary groups, only 4 bands would require a salary increase above inflation (6%) to keep up with rising vehicle prices.

This is most pronounced is in the highest tier:

Where someone earning R293,711 per month could finance a Maserati Grandcabrio MC Automatic Cabriolet in 2016, for the 2017 model (Maserati GranCabrio Sport 4.7 AT Cabriolet), you would need a salary increase of 36% to R400,171 per month.

This above-inflation trend (though less pronounced) can be seem with two other model replacements – the Mazda3 2.0 Individual 5-dr (2014 to 2016 upgrade) and the Toyota Etios SD 1.5 Xi (2015 to 2016 upgrade), which would require a 9% and 8% monthly gross increase, respectively.

The table below details how income requirements have changed for vehicle finance, compared to last year’s data.

The pricing is based on:

  • Assumed allocation of 20% of a person’s salary (as a broad average)
  • An interest rate of Prime + 2% on Vehicle Asset Finance
  • Car repayments made over a five year period
  • Stock price of a vehicle with no extras
  • 100% financing with no deposit made in purchasing the car, but initiation fees and other related costs are excluded.
Car List Price 2016 List Price 2017 Income required 2016 Income required 2017 Change
Maserati GranCabrio Sport 4.7 AT Cabriolet MY15 R2 611 000 R3 557 400 R293 711 R400 171 36%
Jaguar F-Type 5.0 V8 R Coupe AWD MY16 AT R1 940 800 R2 038 100 R218 320 R229 265 5%
Range Rover Evoque 2.0 Si4 Autobiography AT MY16 R977 500 R1 026 600 R109 959 R115 482 5%
BMW 440i Gran Coupe 8-SP Sports Model (2016) R786 900 R837 400 R88 518 R94 199 6%
Subaru Outback 3.6 RS AWD CVT MY16 R599 000 R617 000 R67 381 R69 406 3%
A4 2.0T FSI Sport S-Tronic MY16 R532 000 R557 500 R59 845 R62 713 5%
Kia Sportage 2.0 AWD AT (2014) R442 000 R453 000 R49 720 R50 958 2%
Mini Cooper Convertible 1.5 MY16 R379 000 R405 000 R42 634 R45 558 7%
Mazda3 2.0 Individual 5-dr MY14 R309 300 R338 500 R34 793 R38 078 9%
Hyundai i20 1.2 Motion 5-dr MY15 R215 900 R224 900 R24 287 R25 299 4%
Toyota Etios SD 1.5 Xi MY15.5 R159 600 R172 200 R17 953 R19 371 8%
Chery QQ3 0.8 TE 5-dr R88 900* R94 000 R10 000* R10 574 6%

* Geely LC 1.0 GS listed in 2016, no longer available.

Read: How to reduce your car insurance premiums

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How much more you need to earn in 2017 to afford the same car you could last year