The cost of a Mercedes-Benz vehicle has more than doubled in the past decade, and today, people need to earn up to R50,000 more per month to afford the same car as in 2014.<\/p>\n\n\n\n
In 2024, more than 70% of all the cars in South Africa now cost more than R500,000.<\/p>\n\n\n\n
One key reason for this spike concerns the Covid-19 pandemic, which saw car factories around the world shut down and lay off workers when lockdown restrictions were enforced, and the demand for cars dropped.<\/p>\n\n\n\n
After the easing of restrictions, consumer spending quickly rebounded, while production was slower to return to pre-Covid levels. This created a supply-and-demand problem, leading to inflation. <\/p>\n\n\n\n
In South Africa, the poor performance of the local economy and the rand\/US dollar exchange rate have magnified this effect, making it exponentially more expensive to import and sell vehicles here.<\/p>\n\n\n\n
To reflect the magnitude of vehicle price increases, BusinessTech looked at the prices of a Mercedes-Benz GLA200 in 2014 compared to today in 2024 and how much you need to afford it in their respective time periods.<\/p>\n\n\n\n
In 2014, a GLA200 cost R398,800.<\/p>\n\n\n\n
According to financing experts, individuals should spend no more than 25% of their monthly income on vehicle-related costs, which means they would have required an estimated salary of around R35,000 per month.<\/p>\n\n\n\n
This assumes the cars are financed over five years (60 months) at an annual interest rate of 10.5% (prime in 2014 (9.25%) +1.25%, with a 0% deposit or balloon payment.<\/p>\n\n\n\n
Fast-forward to 2024, and the vehicle now costs R922,841\u2014a R524,000 increase or 131%\u2014which requires a salary increase of R50,000 or 141% to R84,300 per month to afford the same car. <\/strong><\/p>\n\n\n\n This assumes the same parameters as in 2014 but at an annual interest rate of 13% (2024 prime (11.75%) +1.25%).<\/p>\n\n\n\nModel <\/th> Price 2014<\/th> Price 2024<\/th> Change <\/th><\/tr><\/thead> Mercedes-Benz GLA200<\/td> R398 800<\/td> R922 841<\/td> +R524 041 (131.4%)<\/mark><\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n Model<\/th> Income 2014 (pm)<\/th> Income 2024 (pm)<\/th> Change<\/th><\/tr><\/thead> Mercedes-Benz GLA200<\/td> R34 668<\/td> R84 376<\/td> +R49 708pm<\/mark> (143%)<\/mark><\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n