The cars you can afford on the average salary in South Africa right now

 ·8 Jul 2023

New vehicles have become notably more expensive in South Africa, and this is evident in the lack of choice those that earn the average salary in South Africa have when looking to buy a car.

According to the latest quarterly employment survey (QES) published by Stats SA, the average salary in South Africa decreased by 2.7% from the previous quarter to R25,304 from R26,002 per month.

The decline resulted as total gross earnings paid to employees decreased by 4,0% from R864.2 billion in December 2022 to R830,0 billion in March 2023.

This was largely due to decreases in industries such as trade, community services, manufacturing, construction, transport and electricity.

Data published by The University of Cape Town’s Liberty Institute of Strategic Marketing showed that a household needs to earn around R22,000 to be considered middle class in South Africa.

This would mean that the average formally-employed non-agricultural worker in the country would fit into that class category.

Although the majority of non-agricultural workers in South Africa earn this monthly salary, they can only afford 10 new vehicles with it, as the cost of new vehicles has risen substantially over the years.

According to TransUnion’s latest Vehicle Pricing Index (VPI), the price of new vehicles, on average, increased by 6.3% alone in Q1 2023.

However, the price of a car doesn’t reflect the true cost of ownership, as motorists will need to factor in monthly fuel costs, insurance and running costs (maintenance).

According to WesBank’s estimates, the actual cost of ownership has increased by 14% since November 2022 alone, while, over the past three years, the cost of car ownership has increased by a staggering 50.6% since 2021.

When considering this with the fact that prices of new cars are increasing in South Africa, and there’s very little choice for those earning the average salary.

According to financing experts, individuals should spend no more than 25% of their monthly income on vehicle-related costs – meaning those earning R25,304 per month should spend no more than R6,326 on vehicle expenses.

This assumes the cars are financed over five years (60 months) at an annual interest rate of 11.75%, with a 0% deposit or balloon payment.

However, the experts noted that vehicle-related costs include:

  • vehicle instalments
  • Insurance premiums
  • Fuel costs

Therefore, we capped the monthly repayment on the price of the vehicle alone at R5,000, meaning the average income earner can afford a car priced up to R220,000.

There are currently only 10 cars priced under R220,000 in South Africa, and these are listed below with pricing and estimated monthly repayment amount.

Suzuki S-Presso

  • Starting price: R169,900
  • Estimated monthly repayment: R3,854

Suzuki Celerio

  • Starting price: R183,900
  • Estimated monthly repayment: R4,163

Renault Kwid

  • Starting price: R184,999
  • Estimated monthly repayment: R4,188

Toyota Vitz

  • Starting price: R189,900
  • Estimated monthly repayment: R4,296

Suzuki DZire

  • Starting price: R198,900
  • Estimated monthly repayment: R4,495

Proton Saga

  • Starting price: R199,900
  • Estimated monthly repayment: R4,517

Suzuki Swift

  • Starting price: R199,900
  • Estimated monthly repayment: R4,517

Renault Triber

  • Starting price: R210,999
  • Estimated monthly repayment: R4,762

Kia Picanto

  • Starting price: R216,995
  • Estimated monthly repayment: R4,895

Suzuki Ignis

  • Starting price: R217,900
  • Estimated monthly repayment: R4,915

Read: The cheapest cars on offer by luxury brands in South Africa – and how much they cost

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