These are the cars you can afford with your salary in South Africa

Vehicle manufacturer Suzuki has published a guide on how much it costs to buy a car in South Africa, based on different salary thresholds.

The group noted that the general rule of thumb is that you shouldn’t spend more than a quarter (25%) of your monthly income on vehicle-related costs.

So, if you are earning R20,000 per month, your total vehicle expenses should not exceed R5,000. And this should apply to the full vehicle expense including:

• Vehicle instalments
• Insurance premiums
• Fuel costs

The most effective method is to use a trusted online calculator, the group said. Here you will have to factor in expenses such as education, groceries, loans, credit cards and entertainment to get an estimate of what you will be able to afford.

This will give you a very good indication of whether you can afford any kind of vehicle at this point and what price range you should be looking at.

“Once you have done the above-mentioned calculations, you can start looking at vehicles that fall within your price range. To make sure you are looking within the correct range, use a vehicle instalment calculator to calculate how much an R250,000 vehicle, for example, will cost you per month,” it said.

“At this stage, it’s important to remember point one – that you need to include your estimated insurance premiums and fuel costs to not overextend your monthly budget.”

What can you afford? 

Below BusinessTech looked at what you can afford to buy on your monthly salary in South Africa, using the above assumption that people are not going to spend more than 25% of their gross monthly income on vehicle financing.

The calculations were done using Wesbank’s repayments calculator and include the assumption of a 0% deposit for car financing. They also exclude any additional fees which could be incurred during the inception of the loan into the calculation. Finally, the cars are financed over five years (60 months) at an annual interest rate of 9%.

These calculations are purely for comparison purposes and are not meant as financial advice.