{"id":776001,"date":"2024-06-10T10:30:00","date_gmt":"2024-06-10T08:30:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=776001"},"modified":"2024-06-10T10:18:50","modified_gmt":"2024-06-10T08:18:50","slug":"what-you-need-to-earn-to-afford-the-cheapest-audi-bmw-and-merc-in-south-africa-in-2024","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/motoring\/776001\/what-you-need-to-earn-to-afford-the-cheapest-audi-bmw-and-merc-in-south-africa-in-2024\/","title":{"rendered":"What you need to earn to afford the cheapest Audi, BMW, and Merc in South Africa in 2024"},"content":{"rendered":"\n

The cost of a new premium German car in South Africa has significantly increased, making it necessary for a prospective car buyer to be in the top 7% of earners to afford the cheapest models from Audi, BMW, or Mercedes-Benz.<\/p>\n\n\n\n

The latest TransUnion Vehicle Pricing Index (VPI) indicated the price of new vehicles rose well above inflation in the last quarter of 2023. <\/p>\n\n\n\n

The index measures the relationship between the increase in vehicle pricing for new and used vehicles from a basket of passenger vehicles comprising 15 top-volume manufacturers. <\/p>\n\n\n\n

According to the report, the average price of new vehicles increased by 6.3% in Q4 2023, respectively (1.3% above inflation).<\/p>\n\n\n\n

The report noted that price increases in almost all segments exceeded the CPI, except for electric vehicles, which only saw a 1.1% increase.<\/p>\n\n\n\n

On average, the price of all body types rose during the period, with hybrids and hatchbacks experiencing the sharpest increase at 104.% and 7.8%, respectively, in Q4 2023. <\/p>\n\n\n\n

It’s not surprising that the hatchbacks, which are the cheapest cars from some of the most popular luxury brands, saw the steepest price increases year-on-year.<\/p>\n\n\n\n

Some of the most popular luxury car brands in South Africa are Audi, BMW, and Mercedes-Benz. The cheapest models from these manufacturers are priced at well over R500,000, except for the Audi. <\/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 of the many contributors to this fact is the poor performance of the local economy and the rand\/US dollar exchange rate, which has made it notably more expensive to import and sell vehicles here in recent years.<\/p>\n\n\n\n

The most affordable German luxury car is the Audi A1, which costs R492,600 in June 2024, up from R487,300 in January. <\/p>\n\n\n\n

Despite the increase, it’s still over R199,000 cheaper than the BMW 1 Series (R691,716) and over R300,000 cheaper than the most expensive of the three, the Mercedes-Benz A-Class (R796,559 821,491).<\/p>\n\n\n\n

The A-Class is the most expensive hatchback and has increased by almost R35,000 since January, from R796,559 to R821,491.<\/p>\n\n\n\n

Interestingly, comparing the cost of a Mecedes-Benz GLA200 from 2014 to 2024<\/a> shows that the car’s cost has increased by 131.4% over the past decade. <\/p>\n\n\n\n

Sales for Audi, Mercedes-Benz, and BMW have more than halved over the same period, with total sales declining from 71,889 in 2014 to 26,202 in 2023\u2014a concerning 63.5% decline.<\/p>\n\n\n\n

Experts said that this shift is driven by competitive pricing, quality, and high-tech specifications from other manufacturers, such as the Chinese.<\/p>\n\n\n\n

This is reshaping the competitive landscape and posing challenges for traditional premium dealerships.<\/p>\n\n\n\n

How much you need to earn in June 2024<\/strong><\/p>\n\n\n\n

Assuming a payment term of 60 months (five years), at a lending rate of 13% (prime (11.75% + 1.25%) and a 0% deposit, the monthly instalment amount of the Audi A1 is roughly R11,305.<\/p>\n\n\n\n

Experts still recommend that prospective car owners spend no more than 25% of their monthly income on vehicle finance \u2013 meaning you\u2019d have to earn no less than R45,000 per month to afford the cheapest car on this list.<\/p>\n\n\n\n

According to the World Inequality database, this puts you in the top 7% of income earners in South Africa \u2013 meaning 93% of the country\u2019s population earns less than you.<\/p>\n\n\n\n

The cheapest Audi, BMW, and Mercedes-Benz are listed below, along with the starting price, estimated monthly instalment, and monthly salary required to afford the vehicle.<\/p>\n\n\n\n

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Audi A1<\/strong><\/p>\n\n\n\n