{"id":727670,"date":"2023-10-29T15:00:00","date_gmt":"2023-10-29T13:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=727670"},"modified":"2023-10-30T11:56:20","modified_gmt":"2023-10-30T09:56:20","slug":"there-are-only-4-new-cars-you-can-afford-with-the-average-take-home-pay-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/motoring\/727670\/there-are-only-4-new-cars-you-can-afford-with-the-average-take-home-pay-in-south-africa\/","title":{"rendered":"There are only 4 new cars you can afford with the average take-home pay in South Africa"},"content":{"rendered":"\n

New vehicles have become notably more expensive in South Africa, and this is evident in the fact that there are only four new vehicles that can be afforded on the average take-home pay in the country. <\/p>\n\n\n\n

According to the latest BankservAfrica Take-home Pay Index (BTPI) for September, nominal take-home showed monthly and annual growth for the third month in a row.<\/p>\n\n\n\n

The nominal take-home pay of R15,673 in September was a marginal growth on the R15,605 recorded in August and 4.1% higher than the R15,056 in September 2022. <\/p>\n\n\n\n

The BTPI improved by 6.8% from the R14,623 in Q2 and the R15,610 in Q3, indicating that 2023 could be a better year for salaries than 2022.<\/p>\n\n\n\n

\u201cWhile the ability for companies to pay inflation-related salary increases was hampered in the past 18 months, especially by a rising operating cost environment, industries have generally become more resilient to the effects of load shedding,\u201d said Elize Kruger, Independent Economist.<\/p>\n\n\n\n

\u201cIf sustained, the somewhat better conditions in the private sector could provide better employment and remuneration prospects in the coming months.\u201d<\/p>\n\n\n\n

Despite the positive news, workers in South Africa who earn this monthly salary can only afford four new vehicles as the cost of new vehicles has risen substantially over the years.<\/p>\n\n\n\n

According to TransUnion\u2019s latest Vehicle Pricing Index (VPI), the price of new vehicles, on average, increased by 6.7% alone in 2023.<\/p>\n\n\n\n

However, the price of a car doesn\u2019t reflect the true cost of ownership, as motorists will need to factor in monthly fuel costs, insurance and running costs (maintenance).<\/p>\n\n\n\n

According to WesBank\u2019s 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<\/strong>.<\/p>\n\n\n\n

When considering this with the fact that prices of new cars are increasing in South Africa, and there\u2019s very little choice for those earning the average salary.<\/p>\n\n\n\n

According to financing experts, individuals should spend no more than 25% of their gross income on their vehicles. Your gross income is the amount that you earn before taxes and mandatory deductions.<\/p>\n\n\n\n

Considering the relevant income tax for this bracket, those taking home R15,673 would be earning around R17,362 per month. <\/p>\n\n\n\n

This means these individuals should spend no more than R4,341 on a vehicle, assuming an interest rate of 11.75% (prime) and a term of 60 months with a 0% deposit, the average income earner can only afford a car priced up to R192,000.<\/strong><\/p>\n\n\n\n

There are currently only four cars priced under R192,000 in South Africa, which are listed below.<\/p>\n\n\n\n

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Suzuki S-Presso<\/strong><\/p>\n\n\n\n