{"id":730587,"date":"2023-11-11T13:00:00","date_gmt":"2023-11-11T11:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=730587"},"modified":"2023-11-10T17:17:12","modified_gmt":"2023-11-10T15:17:12","slug":"the-real-cost-of-owning-a-car-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/motoring\/730587\/the-real-cost-of-owning-a-car-in-south-africa\/","title":{"rendered":"The real cost of owning a car in South Africa"},"content":{"rendered":"\n<p>When it comes to making big purchases, a car is likely to be the second most expensive one, right after a home. However, it&#8217;s important to keep in mind that your loan payment is just one of the many costs to consider.<\/p>\n\n\n\n<p>Besides monthly payments, there are other expenses to consider. For instance, homeowners should budget for rates, property maintenance, and security contracts. Similarly, owning a car means extra costs to factor in when choosing the right vehicle.<\/p>\n\n\n\n<p>According to <a href=\"https:\/\/personal.nedbank.co.za\/learn\/blog\/real-costs-of-owning-a-car-in-south-africa.html\" target=\"_blank\" rel=\"noreferrer noopener\">Nedbank<\/a>, Affordability must be a top priority \u2013 there\u2019s no point in cruising around in your dream wheels if you\u2019re digging small change out the back of your couch to make ends meet every month.<\/p>\n\n\n\n<p>Suppose you have decided to purchase a hatchback, which is one of South Africa&#8217;s most popular vehicles such as the Volkswagen Polo, Toyota Starlet or Suzuki Swift. <\/p>\n\n\n\n<p>You notice that the specific model you desire costs around R250,000. <\/p>\n\n\n\n<p><strong>Your loan, in this example, might be structured as follows:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Purchase price: R250,000<\/li>\n\n\n\n<li>Deposit: R0<\/li>\n\n\n\n<li>Residual value (\u2018balloon payment\u2019) option taken: 35% (R87,500)<\/li>\n\n\n\n<li>Vehicle loan finance period: 60 months<\/li>\n\n\n\n<li>The interest rate offered by vehicle financiers: is 9%<\/li>\n\n\n\n<li>Amount financed, excluding balloon payment: R162,500<\/li>\n\n\n\n<li>Monthly admin fee for finance: R69.00<\/li>\n\n\n\n<li>Once-off admin fee for finance: R1,207.50<\/li>\n\n\n\n<li>Total monthly car instalment: R4,174.08 per month.<\/li>\n<\/ul>\n\n\n\n<p class=\"has-medium-font-size\"><strong>Other costs you need to Budget for<\/strong><\/p>\n\n\n\n<p>According to Nedbank, while R4,174.08 a month might look affordable, that\u2019s just your loan repayment, and these are listed below. <\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>1. Petrol or diesel<\/strong>&nbsp;A&nbsp;compact hatchback&nbsp;with a 40-litre fuel tank will cost around R1,000 to fill up. If the car uses 8 litres per 100km, you\u2019ll be able to travel 500km on one tank. If you travel 1,000km per month, petrol will cost you at least R2,000 a month, in addition to your R4,174.08 instalment.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>2. Car insurance<\/strong>&nbsp;This will vary based on your age, where you live, how long you\u2019ve had your driving licence and other factors. But on average,&nbsp;insurance&nbsp;on a compact new hatchback will cost around R1,000 per month. Add that to your loan and fuel costs, and you\u2019re already spending more than R6,000 a month.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>3. Annual fees<\/strong>&nbsp;Each year you\u2019ll have to pay for a new disc for your windscreen to prove that your vehicle is registered. The more your car weighs, the more it costs to renew your registration. A small hatchback can cost around R600 a year for a new licence disc \u2013 taking your grand total closer to R6,800 for one month of the year.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>4. Maintenance<\/strong>&nbsp;If your car doesn\u2019t come with a manufacturer\u2019s maintenance plan to cover wear and tear, you\u2019ll spend money regularly to keep the vehicle in tip-top shape. Getting the car serviced every 10,000 to 15,000km and maintaining fast-wearing parts like tyres and brake pads can easily cost R6,000 or more a year \u2013 that\u2019s another R500 a month to add to your motoring budget.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>5. Toll fees<\/strong>&nbsp;Toll costs can escalate quickly if you spend a lot of time driving on major highways.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>6. Car washes \u2013<\/strong>&nbsp;An average car wash can cost R100 or more. If you like to start each week with a clean vehicle \u2013 and you aren\u2019t prepared to clean it yourself, at home \u2013 you\u2019ll have to budget at least R400 a month for this as well.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>&#8220;As you can see, what started as a monthly cost of less than R4,200 could easily cost you a total of R7,000 or R8,000 a month instead. And accidents happen: Even if you drive ultra-carefully, another driver could crash into you,&#8221; said Nedbank. <\/p>\n\n\n\n<p>Remember the balloon payment of R87,500 is due at the end of your 60-month loan term. Save in a notice account every month to cover the payment, or consider taking out a personal loan. <\/p>\n\n\n\n<p>However, a loan for R87,500 at 18.75% interest would cost R4,900 per month over 2 years, extending your car payment period to 7 years, warned Nedbank. <\/p>\n\n\n\n<p class=\"has-medium-font-size\"><strong>Buy a car with your head, not your heart<\/strong><\/p>\n\n\n\n<p>While it may be tempting to purchase that stylish car that you have your heart set on, it is more financially sound to make sure that all of the costs associated with owning a car will remain affordable. <\/p>\n\n\n\n<p>This may mean choosing a less expensive model which requires a smaller loan. Knowing that you won&#8217;t have to sacrifice any of the additional costs or make budget cuts just to afford your car will do wonders for your peace of mind, said the bank. <\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>Read: <a href=\"https:\/\/businesstech.co.za\/news\/motoring\/729123\/the-top-10-car-brands-and-models-south-africans-are-buying-right-now\/\">The top 10 car brands and models that South Africans are buying right now<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Nedbank warns to consider all the costs that come with a car purchase before you pull the trigger. <\/p>\n","protected":false},"author":10,"featured_media":716226,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11119],"tags":[1799,853],"class_list":["post-730587","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-motoring","tag-nedbank","tag-south-africa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/730587","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=730587"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/730587\/revisions"}],"predecessor-version":[{"id":730629,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/730587\/revisions\/730629"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/716226"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=730587"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=730587"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=730587"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}