The cars South Africans can afford on the average salary at the end of 2023

New vehicles have become notably more expensive in South Africa over the course of 2023, leaving those who earn the average salary in South Africa with little option when looking to buy a car.

According to the latest quarterly employment survey (QES) published by Stats SA, the average salary in South Africa saw a negligible increase of 0.9% from the previous quarter to R26,087 from R25,866 per month.

The increase resulted as basic salary/wages paid to employees increased by R15.2 billion or 2.0% from R759 billion in June 2023 to R774.3 billion in September 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 eight new vehicles, 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 6.5% in Q3 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.

Considering the fact that prices of new cars are increasing in South Africa, there is very little choice for those earning the average salary.

Financing experts recommend spending no more than 25% of monthly income on vehicle-related expenses. For example, those earning R26,087 per month should spend no more than R6,522 on such 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 R222,000.

There are currently only eight cars priced under R222,000 in South Africa, and these are listed below with pricing and estimated monthly repayment amounts.

Suzuki S-Presso

• Starting price: R174,900
• Estimated monthly repayment: R3,964

Suzuki Celerio

• Starting price: R188,900
• Estimated monthly repayment: R4,274

Renault Kwid

• Starting price: R192,999
• Estimated monthly repayment: R4,365

Toyota Vitz

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

Suzuki DZire

• Starting price: R204,900
• Estimated monthly repayment: R4,628

Proton Saga

• Starting price: R209,900
• Estimated monthly repayment: R4,738

Suzuki Swift

• Starting price: R205,900
• Estimated monthly repayment: R4,650

Suzuki Ignis

• Starting price: R217,900
• Estimated monthly repayment: R5,070

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