Analytics group Lightstone recently released a report detailing the value of the type of second-hand car you can afford based on your monthly salary in South Africa in 2018.
The report is based on current South African vehicle prices and salaries (May 2018), and assumes that people are not going to spend more than 20% of their gross monthly income on financing a car. The calculations also assume that the vehicles are financed over five years at an interest rate of prime +2%.
According to TransUnion’s latest Vehicle Pricing Index, the make-up of used vehicle sales has shown that 46% are under two years old and 9% were demo models which indicates consumers are opting for cars that are less than two years old.
The percentage of cars (new and used) being financed below R200,000 has remained consistent to last quarters numbers with 43% in Q1.
“This has shown a marginal increase in used car loans which has being consistent at around R242,000. This indicates a shifting emphasis on the value proposition that consumers place on their vehicles, as they look for the maximum amount of value from a car,” TransUnion said.
When it comes to the types of cars, unsurprisingly, Toyota and VW dominate both the new and used space, capturing more than 35% of the new and used passenger financed volumes, through vehicles including the Polo and Vivo range, the Fortuner and Corolla models.
Using this R242,000 amount, Lightstone estimates that you would need to earn between R26,000-R30,000 to pay for the average second-hand car purchase in South Africa.
Pricing is based on:
- Assumption that people are not going to spend more than 20% of their gross monthly income on financing a car and not more than 30% on servicing a home loan.
- Assumption of a 0% deposit for both home and car financing (but excluding additional fees incurred during the inception of the loan into the calculation.).
- Assumption that the cars are financed over 5 years at an interest rate of prime + 2%.
|Income required||Used vehicles||Year||Used car price|
|R396 000||Huracan LP610-4 5.2 AWD Coupe||2014||R3 544 000|
|R230 000||Mercedes AMG SLS Coupe||2015||R2 055 000|
|R177 000||Range Rover Sport 3.0 V6 Supercharger S 4X4||2017||R1 044 300|
|R100 000||BMW Active Hybrid 7 3.0 M Sport||2015||R892 200|
|R73 000||Toyota Landcruiser Prado 4.0 VX 4X4||2015||R653 200|
|R63 000||Audi A5 Coupe 2.0T FSI MY17 Sport S-Tronic||2017||R565 400|
|R51 000||Chevrolet Trailblazer 2.8 LTZ DSL SUV 4X4||2016||R452 900|
|R48 000||Audi S1 Sportback 2.0T FSI Quattro||2016||R423 100|
|R39 000||Ford Fusion 2.0 Ecoboost Trend||2016||R341 700|
|R26 000||Volkswagen Amarok 2.0 TDI Basic||2015||R224 700|
|R20 000||Peugeot 208 Active 1.2 Puretech||2016||R175 900|
|R12 000||Suzuki Swift 1.2 GA||2014||R99 900|
Range Rover Sport
BMW Active Hybrid 7
Toyota Landcruiser Prado
Audi A5 Coupe
Audi S1 Sportback
Peugeot 208 Active