The real cost of owning a standard R350,000 car in South Africa

 ·11 Feb 2024

When calculating the total cost of owning a new car valued at around R350,000, which includes fuel, insurance, and maintenance, it was found that one should budget 55% more than the monthly repayment amount – giving a more realistic idea of the actual cost of ownership.

Despite interest rate hikes and belt-tightening for over two years, South African consumers have not received any relief from rising inflation.

Petrol prices have risen by over 47% since February 2021. In addition, there are ongoing electricity problems, a weaker rand, and increasing food expenses, which are causing consumers to struggle to pay off their mortgages, car loans, credit cards, and other debts.

As a result, people must find more money each month to pay off the interest on their debt.

In light of recent events, consumers are becoming increasingly mindful of their expenses, including the cost of owning a vehicle.

Ernest North, co-founder of Naked Insurance, has stated that the costs associated with owning a car have significantly increased in the past two years.

According to TransUnion’s latest vehicle pricing index (VPI), the average loan size for a new car is around R359,000 in South Africa.

Considering this, Naked estimated the actual cost of owning an average car – according to TransUnion’s definition – in South Africa in February 2024:

The cost of the car

For the purposes of the article, Naked looked at financing a new VW Polo 1.0 TSI – which currently retails for around R348,200.

If you have cash in the bank, you might be able to pay for it upfront. Since few people can afford to pay cash for a car, most will pay for their car through a cash deposit and financing from a lender.

Your monthly repayment will be determined by the interest rate you pay and the number of months you repay the loan.

However, considering a five-year plan at a typical interest rate of 13% and a 10% deposit, the new Polo will cost you around R7,222 per month.

Fuel costs 

To calculate an approximate petrol bill, you can look at your car’s fuel consumption and the distance you travel each month.

For instance, if your car’s fuel consumption is just below 20km per litre and petrol costs about R23 per litre (as of February 2024), it would cost you approximately R1,150 to travel 1,000 kilometres.

However, remember that petrol prices are unstable and can fluctuate along with the rand and crude oil prices.


If you’re getting a loan to buy your car, the lender will insist you get comprehensive car insurance.

It’s important to have insurance to protect yourself from loss and liability, even if you’re not getting a loan. It’s a good idea to get a few quotes to ensure you’re getting the best possible price.

Insurance premiums are determined by evaluating how much of a risk you are so that prices can vary between different drivers. However, for a Polo, you can expect to pay around R970 per month.

Repairs and maintenance

Despite having a service pan, you’ll still need to budget for expendables like brake pads, windscreen wipers and tyres.

This usually averages roughly 2% of the car’s value each year, or about R6,900 for your R348,000 car.

If you don’t have a warranty and service plan, you should also plan on spending a minimum of R7,500-R15,000 per year for services and the unforeseen breakdown of major parts.

How much it will cost you will be influenced by the age of the vehicle and how much you drive, said Naked.

Adding it altogether

After driving 1,000 kilometres a month, the cost of driving a modest car exceeds R134,000 per year, and over the five-year financing period for your car, that will amount to around R670,000 in costs.

Naked estimated that once your car is paid off in five years’ time, it will be worth around R165,000 – so your net costs for owning a vehicle will amount to around R505,000.

“Given that most people’s salaries are not keeping up with inflation, it makes sense to be cautious in your budgeting rather than splashing out on the latest and best model.

“Leave a bit of a cushion in your budget to provide for petrol price increases, higher insurance costs, and rising maintenance costs,” said North.

The table below summarises the estimated monthly costs for owning and driving a new Polo 1.0 TSI, which retails for around R348,000.

Car payment R7 222
Fuel R1 150
Long term maintenance (average per month)R575
Services & unforeseen maintenanceR1 250
Average cost per monthR11 167
Total after 60 months R670 020

Read: How much it costs to renew your car licence in South Africa in 2024

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