{"id":804648,"date":"2024-12-27T17:00:00","date_gmt":"2024-12-27T15:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=804648"},"modified":"2024-12-27T12:26:05","modified_gmt":"2024-12-27T10:26:05","slug":"cars-you-can-afford-on-the-average-salary-in-south-africa-at-the-end-of-2024","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/motoring\/804648\/cars-you-can-afford-on-the-average-salary-in-south-africa-at-the-end-of-2024\/","title":{"rendered":"Cars you can afford on the average salary in South Africa at the end of 2024"},"content":{"rendered":"\n

In South Africa at the close of 2024, the rising cost of new cars has left average earners with 10 new cars to choose from. <\/p>\n\n\n\n

According to the latest data from Stats SA\u2019s Quarterly Employment Survey, the average monthly earnings for non-agricultural workers increased by 2.6% in the third quarter of 2024, rising from R27,511 in Q2 to R28,220. <\/p>\n\n\n\n

This growth was largely driven by gains in sectors such as business services, community services, mining, and electricity. <\/p>\n\n\n\n

However, even with this increase, only ten new cars remain affordable for individuals earning the average salary.<\/p>\n\n\n\n

The affordability of a car goes beyond its sticker price, as buyers must also account for fuel, insurance, and maintenance costs. <\/p>\n\n\n\n

WesBank estimates that the true cost of car ownership in South Africa has surged by an astonishing 50.6% since 2021. <\/p>\n\n\n\n

This spike is primarily due to persistently high inflation and escalating petrol prices. The financial strain has pushed many consumers towards older, more affordable used vehicles or alternative financing models, as noted by TransUnion in its latest report. <\/p>\n\n\n\n

The report highlights that economic pressures have squeezed lower-income buyers out of the market for new cars entirely, leaving them to seek cost-effective mobility solutions.<\/p>\n\n\n\n

Financing experts emphasise that individuals should allocate no more than 25% of their monthly income to vehicle-related expenses. <\/p>\n\n\n\n

For someone earning an average salary of R28,220, this translates to a budget of R7,055 per month for car costs, including instalments, insurance, and fuel.<\/strong><\/p>\n\n\n\n

Given this guideline, the portion allocated solely to car repayments is typically capped at R5,500. <\/p>\n\n\n\n

At a financing rate of 12.50% over 60 months with no deposit or balloon payment, this cap equates to an affordable car price of roughly R240,000.<\/strong><\/p>\n\n\n\n

While ten new cars remain within reach of this budget, the list is shrinking as vehicle prices continue to climb. Industry experts attribute this trend to multiple factors. <\/p>\n\n\n\n

Exchange rate fluctuations, for instance, have made imported vehicle components significantly more expensive. <\/p>\n\n\n\n

Coupled with supply chain disruptions, manufacturers face higher production costs, which are inevitably passed on to consumers.<\/p>\n\n\n\n

Additionally, high fuel prices contribute to the spiralling costs of car ownership.<\/p>\n\n\n\n

\u201cThe price of petrol remains a key driver of overall inflation,\u201d notes Dawie Roodt, chief economist at Efficient Group. South Africa\u2019s reliance on imported oil, coupled with a volatile rand, means that fuel costs are unlikely to stabilise soon. <\/p>\n\n\n\n

This affects consumers\u2019 ability to manage monthly running costs, further reducing their willingness to commit to new vehicle purchases.<\/p>\n\n\n\n

For average earners in South Africa, the dream of owning a new car is becoming increasingly difficult to achieve. Although the average salary has grown marginally, it has not kept pace with the escalating costs of vehicles and ownership. <\/p>\n\n\n\n

With limited options available within their price range, many are forced to consider used cars or alternative mobility solutions. <\/p>\n\n\n\n

As economic pressures persist, the affordability gap is likely to widen, making the market for new cars an increasingly exclusive one.<\/p>\n\n\n\n

There are currently only 10 cars priced under R240,000 in South Africa, and these are listed below with pricing and estimated monthly repayment amount.<\/p>\n\n\n\n

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