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 \u2013 giving a more realistic idea of the actual cost of ownership.<\/p>\n\n\n\n
Despite interest rate hikes and belt-tightening for over two years, South African consumers have not received any relief from rising inflation.<\/p>\n\n\n\n
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. <\/p>\n\n\n\n
As a result, people must find more money each month to pay off the interest on their debt.<\/p>\n\n\n\n
In light of recent events, consumers are becoming increasingly mindful of their expenses, including the cost of owning a vehicle. <\/p>\n\n\n\n
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. <\/strong><\/p>\n\n\n\n According to TransUnion’s latest vehicle pricing index (VPI), the average loan size for a new car is around R359,000 in South Africa.<\/strong><\/p>\n\n\n\n Considering this, Naked estimated the actual cost of owning an average car – according to TransUnion’s definition – in South Africa in February 2024: <\/p>\n\n\n\n The cost of the car<\/strong><\/p>\n\n\n\n For the purposes of the article, Naked looked at financing a new VW Polo 1.0 TSI \u2013 which currently retails for around R348,200.<\/p>\n\n\n\n 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.<\/p>\n\n\n\n Your monthly repayment will be determined by the interest rate you pay and the number of months you repay the loan. <\/p>\n\n\n\n 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.<\/strong><\/p>\n\n\n\n Fuel costs <\/strong><\/p>\n\n\n\n To calculate an approximate petrol bill, you can look at your car’s fuel consumption and the distance you travel each month. <\/p>\n\n\n\n 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<\/strong>. <\/p>\n\n\n\n However, remember that petrol prices are unstable and can fluctuate along with the rand and crude oil prices.<\/p>\n\n\n\n
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