How much you need to earn to afford the cheapest Audi, BMW, and Merc in South Africa
The cost of new cars in South Africa has risen significantly, requiring a prospective car buyer in South Africa to be in the top 7% of earners to finance the cheapest models from Audi, BMW, or Mercedes-Benz.
The latest TransUnion Vehicle Pricing Index (VPI) shows that the price of new vehicles outstripped inflation year-on-year at the end of 2023.
The index measures the relationship between the increase in vehicle pricing for new and used vehicles from a basket of passenger vehicles incorporating 15 top-volume manufacturers.
According to the report, the price of new vehicles, on average, increased by 6.5% in Q3 2023 – beating inflation by 0.6%, which was recorded at 5.9% in November 2023.
The price increases in almost all segments exceeded CPI, with the exception being electric vehicles (only 1.3%), which skewed the average of 6.5%, noted the report.
On average, the price of all body types increased over the period, with hybrids and hatchbacks seeing the steepest increases at 8% in Q3 2023. Other YoY price increases included: Small SUVs (6.6%), Mid SUVs (7.3%), Premium (5.6%), and Crossovers (6.9%).
Unsurprisingly, the cheapest cars from some of the most popular luxury brands are hatchbacks, which saw the steepest price increases year-on-year.
Some of the most popular luxury brands in South Africa are Audi, BMW, and Mercedes-Benz, with the cheapest models from these manufacturers priced at well over R500,000 – except the Audi.
The most affordable German luxury car is the Audi A1, with a price tag of R487,300 – increasing from R482,400 in September 2023.
Despite the increase, it’s still over R200,000 cheaper than the BMW 1 Series (R691,072) and over R300,000 cheaper than the most expensive of the three, the Mercedes-Benz A-Class (R796,559).
Assuming a payment term of 60 months (five years), at a lending rate of 11.75% and a 0% deposit, the monthly instalment amount of the Audi A1 is roughly R10,765.
Experts still recommend that prospective car owners spend no more than 25% of their monthly income on vehicle finance – meaning you’d have to earn no less than R43,500 per month to afford the cheapest car on this list.
According to the World Inequality database, this puts you in the top 7% of income earners in South Africa – meaning 93% of the country’s population earns less than you.
The cheapest Audi, BMW, and Mercedes-Benz are listed below – including the starting price, estimated monthly instalment, and the monthly salary required to afford the vehicle.
Audi A1
- Starting price: R487,300
- Monthly instalment: R10,874 pm
- Estimated monthly salary required: R43,500 pm
BMW 1 Series
- Starting price: R691,072
- Monthly instalment: R15,381
- Estimated monthly salary required: R62,000
Mercedes-Benz A-Class
- Starting price: R796,559
- Monthly instalment: R17,714
- Estimated monthly salary required: R71,000
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