How much it costs to finance a R300,000 car in South Africa at current rates

 ·23 Jul 2023

Despite the pause on interest rates by the South African Reserve Bank (SARB) on Thursday (20 July), consumers are still under severe financial pressure, and car buyers can expect to pay 11% more for a vehicle compared to just 19 months ago.

The South African Reserve Bank’s (SARB’s) Monetary Policy Committee (MPC) on Thursday voted to hold rates, keeping the repo rate at 8.25%, with the prime lending rate at 11.75%.

Since the start of the rate hike cycle in November 2021, rates have been hiked by 475bps to the highest levels in 14 years.

“Along with electricity and other hikes, the burden on consumers, homeowners and buyers has been simply too high. Consumers, homeowners and buyers have had to absorb enough rate hikes now,” said the chairman of the Seeff Property Group, Samuel Seeff.

WesBank agreed with Seeff’s sentiment, adding that the effects of interest rate increases over the hike cycle on car, home, credit card, and other debt repayments have weighed heavily on consumers.

The credit provider added that household debt levels in South Africa remain at high levels – with more than 62% of disposable income servicing debt.

“Household budgets remain under tremendous pressure, and those who have had car and home loans since the start of the rate hiking cycle, post-Covid-19, have now really started feeling the effects,” said WesBank.

This pressure on consumers was also noted in the National Association of Automobile Manufacturers (Naamsa)’s New Vehicle sales for June 2023, where the new passenger car and light commercial vehicle market reflected a relatively stagnant year-on-year volume increase of 0.8% or 251 units for new passenger cars, recorded from 29,544 in June 2022 to 29,795 in June 2023.

Naamsa said this reflects local motorists’ financial constraints in South Africa, as interest rates, fuel, and food prices remain elevated.

Additionally, the inflationary environment has pushed the prices of cars up in the country, and according to the TransUnion VPI report, 50% of car buyers are looking for vehicles above the R300,000 price bracket.

According to the report, the percentage of cars – both new and used – being financed below R200,000 declined to 20% in Q1 2023 from 25% in Q1 2022 due to the increased average purchase price of new vehicles, leaving little choice for prospective buyers in this price band.

The data further found that 30% of vehicle financing deals were for cars between R200,000 and R300,000.

These compounding effects have meant that South Africans are paying a lot more for cars today than they did 19 months ago.

At the start of the rate cycle, those who purchased a R300,000 vehicle at 7% would be due to pay a total interest amount of R68,259. However, financing the same vehicle today at 11.75% would amount to a total interest of R119.481 – a 75% increase.

The additional monthly expense South Africans are paying for a vehicle, depending on the value of the car, is given in the table below.

Value of the vehicleSeptember 2021 (7%)May 2023 (11.75%)Change
R175 000R3 558R3 966+R408
R200 000R4 053R4 519+R466
R225 000R4 548R5 072+R524
R250 000R5 043R5 625+R408
R275 000R5 538R6 178+R640
R300 000R6 033R6 731+R698
R325 000R6 528R7 284+R756
R350 000R7 023R7 837+R814
R375 000R7 518R8 390+R872
R400 000R8 013R8 943+R930
R450 000R9 003R10 049+R1 046
R500 000R9 994R11 155+R1 161
R550 000R10 984R12 261+R1 277
R600 000R11 974R13 367+R1 393
R650 000R12 964R14 473+R1 509
R700 000R13 954R15 579+R1 625
R750 000R14 944R16 684+R1 740
R800 000R15 934R17 790+R1 856
R850 000R16 924R18 896+R1 972
R900 000R17 914R20 002+R2 088
R950 000R18 904R21 108+R2 204
R1 000 000R19 894R22 214+R2 320

How much more you’re paying for the top 10 best-selling cars

To give you real-world examples of the changes in monthly payments since the rate hike cycle, BusinessTech looked at Naamsa’s top 10 best-selling cars in the first six months of 2023 and calculated how much it would cost to finance before and after the hike cycle.

These cars, including how many units they sold and how much it costs to finance, are listed below.

1. Toyota Hilux – 18,801 units

  • Starting price: R356,600
  • Monthly repayment before the hike cycle (7%): R6,080
  • Monthly repayment right now (11.75%): R 6,925
  • Difference: +R845 per month.

2. Ford Ranger – 11,726 units

  • Starting price: R494,400
  • Monthly repayment before the hike cycle (7%): R8,429
  • Monthly repayment right now (11.75%): R9,601
  • Difference: +R1,172 per month.

3. Toyota Corolla Cross – 10,604 units

  • Starting price: R404,400
  • Monthly repayment before the hike cycle (7%): R6,895
  • Monthly repayment right now (11.75%): R7,854
  • Difference: +R959 per month.

4. Isuzu D-Max – 10,000 units

  • Starting price: R431,800
  • Monthly repayment before the hike cycle (7%): R7,362
  • Monthly repayment right now (11.75%): R8,386
  • Difference: +R1,024 per month.

5. VW Polo Vivo – 9,936 units

  • Starting price: R248,500
  • Monthly repayment before the hike cycle (7%): R4,237
  • Monthly repayment right now (11.75%): R4,826
  • Difference: +R589 per month.

6. Toyota Hiace – 8,469 units

  • Starting price: R543,900
  • Monthly repayment before the hike cycle (7%): R9,273
  • Monthly repayment right now (11.75%): R10,563
  • Difference: +R1,290 per month.

7. Toyota Starlet – 8,355 units

  • Starting price: R248,400
  • Monthly repayment before the hike cycle (7%): R4,235
  • Monthly repayment right now (11.75%): R4,824
  • Difference: +R589 per month.

8. Suzuki Swift – 8,193 units

  • Starting price: R199,900
  • Monthly repayment before the hike cycle (7%): R3,408
  • Monthly repayment right now (11.75%): R3,882
  • Difference: +R474 per month.

9. Nissan NP200 – 6,757 units

  • Starting price: R226,000
  • Monthly repayment before the hike cycle (7%): R 3,853
  • Monthly repayment right now (11.75%): R4,389
  • Difference: +R536 per month.

10. Toyota Fortuner – 5,995 units

  • Starting price: R673,100
  • Monthly repayment before the hike cycle (7%): R11,476
  • Monthly repayment right now (11.75%): R13,072
  • Difference: +R1,596 per month.

Read: How South Africans could save up to R700 on a tank of petrol

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