2 years ago
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ARTICLE AD BOX
For a budget car priced at R280,000 it will cost you about R3,776 more a month to run it than five years ago.
WesBank has issued a table illustrating the steep hike in the cost of car ownership from 2019 to May 2023 due to rising vehicle prices, fuel costs, interest rates, insurance and maintenance.
For the exercise, WesBank took a vehicle valued at R280,000 that travels about 2,500km a month and calculated the instalments, fuel, insurance and maintenance costs. It worked out that an owner today is paying R11,627 monthly for the vehicle, 48% higher than the R7,851 they paid in 2019.
Cars in this price range include the Suzuki Vitara Brezza, VW Polo Vivo and Kia Picanto X-Line.
It is also a significant hike from the R10,165 it cost to run the same car just six months ago, with the biggest increases in monthly repayments due to the ongoing interest rate hikes and insurance fees.
Vehicle instalments (46%) remain the largest portion of the monthly cost, a result of the spate of interest rate hikes over the past year. Fuel spend (35%) is second, followed by insurance (15%), while running costs account for 4% at R493.
The percentage breakdowns remain similar to those in 2019.
The figures are further evidence of the wide-reaching impact of global and local influences on the cost of vehicle ownership, such as the war in Ukraine and chip shortages affecting production, says the bank.
“Prospective vehicle owners should take a holistic view when planning a car purchase by rightsizing the spend to fit their budget to ensure they don’t overextend themselves,” says Lebogang Gaoaketse, head of marketing and communication at WesBank.
“This includes making allowances for increased costs down the line, such as another interest rate hike or higher fuel prices. The smartest move is to make provision for these rising costs over the duration of the finance contract.”
Consumers’ budgets are strained after two interest rate hikes this year, with a possible third expected at the end of May.
English (US)