{"id":804826,"date":"2025-01-05T12:00:00","date_gmt":"2025-01-05T10:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=804826"},"modified":"2025-01-03T13:46:35","modified_gmt":"2025-01-03T11:46:35","slug":"how-much-you-need-to-earn-to-afford-the-cheapest-audi-bmw-and-mercedes","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/motoring\/804826\/how-much-you-need-to-earn-to-afford-the-cheapest-audi-bmw-and-mercedes\/","title":{"rendered":"How much you must earn to afford the cheapest Audi, BMW, and Mercedes"},"content":{"rendered":"\n

Owning a premium German car in South Africa has become a luxury reserved for the country\u2019s top earners. <\/p>\n\n\n\n

As prices soar well above inflation, the affordability of the cheapest models from Audi, BMW, and Mercedes-Benz now requires buyers to be in the upper-income brackets.<\/p>\n\n\n\n

According to the latest TransUnion Vehicle Pricing Index (VPI), the cost of new vehicles rose significantly in the second quarter of 2024. <\/p>\n\n\n\n

This index, which tracks pricing trends for new and used vehicles from 15 top-volume manufacturers, showed a 4.4% year-on-year increase in new car prices during this period\u2014a rate 1.5% higher than inflation. <\/p>\n\n\n\n

While most vehicle segments experienced price hikes, hatchbacks and hybrids were hit hardest, with price increases of 7.6% and 4.6%, respectively. <\/p>\n\n\n\n

Even premium SUVs and electric vehicles, which saw relatively modest price growth at 2.7% and 1.1%, contributed to the overall trend.<\/p>\n\n\n\n

Hatchbacks, often the entry-level models for luxury brands, have seen the steepest price hikes. <\/p>\n\n\n\n

This is evident in the cost of the Audi A1, BMW 1 Series, and Mercedes-Benz A-Class. The Audi A1, currently the most affordable option among the three, is priced at R523,200. <\/p>\n\n\n\n

The BMW 1 Series follows at R713,395, while the Mercedes-Benz A-Class tops the list at R826,024.<\/p>\n\n\n\n

These figures highlight how much the landscape of vehicle affordability has shifted, with over 70% of all cars in South Africa now costing more than R500,000.<\/p>\n\n\n\n

Several factors contribute to these rising costs. The weak rand and a sluggish local economy have made it increasingly expensive to import and sell vehicles in South Africa. <\/p>\n\n\n\n

This has had a profound impact on sales for premium brands. Over the past decade, combined sales for Audi, BMW, and Mercedes-Benz have plummeted by 63.5%, falling from 71,889 units in 2014 to just 26,202 units in 2023. <\/p>\n\n\n\n

At the same time, competitors from other markets, particularly China, have gained traction by offering competitive pricing, advanced technology, and solid build quality, reshaping the market dynamics.<\/p>\n\n\n\n

The affordability challenge becomes even starker when considering the financial commitment required to own one of these vehicles. <\/p>\n\n\n\n

Using the Audi A1 as an example, financing the car over 60 months at a 12.5% lending rate (prime rate of 11.25% plus 1.25%) with no deposit would result in a monthly instalment of approximately R11,867.<\/p>\n\n\n\n

Financial experts advise that car payments should not exceed 25% of your monthly income. By this standard, you would need to earn at least R47,500 per month to comfortably afford this vehicle.<\/p>\n\n\n\n

To put this into perspective, data from the World Inequality Database indicates that earning R47,500 places you among South Africa\u2019s top 10% of income earners. <\/p>\n\n\n\n

This means 90% of South Africans earn less than this threshold, underscoring the exclusivity of owning even the cheapest models from these premium brands.<\/p>\n\n\n\n

The long-term trends also paint a stark picture of escalating costs. <\/p>\n\n\n\n

For instance, a Mercedes-Benz GLA200 that cost R400,000 in 2014<\/a> now commands a price of over R926,000, marking a staggering 131.4% increase in just 10 years. <\/p>\n\n\n\n

Such steep price growth further emphasizes the financial hurdles prospective buyers face.<\/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