wesbank

In 2022 thus far, it cost the average South African motorist R9,356.80 to keep their car on the road, this sum covering the finance instalment, fuel, insurance, and maintenance costs of the vehicle, according to finance institution WesBank.

This is a staggering 21.27% higher than for the same period in 2021 when the monthly cost of ownership was R7,715.94.

WesBank attributes these higher costs to the lasting effects of the Covid-19 pandemic that impacted citizens’ mobility needs, rising interest rates, and increases in the prices of fuel, tyres, and spare parts.

“While fuel prices continue to hit record levels due to, among other things, the ongoing unrest between Russia and the Ukraine, fluctuations in the currency, and a series of interest rate hikes, it is the consumer who is now facing the brunt of continual rising prices,” said WesBank.

“Being back on the road means we now have to manage the actual costs of total vehicle ownership and these need to be factored into what is for many an already constrained budget.”

Detailed in the table below (click to enlarge) is the average cost of keeping a vehicle on the road in South Africa, as per WesBank:

wesbank

How it works

To reach the above conclusions, WesBank calculated what it will cost to purchase and own an average entry-level vehicle in South Africa which sells for around R250,000 and travels for approximately 2,500km per month.

Vehicle instalments and fuel spend are the largest portions of the basket, accounting for 81% of a motorist’s monthly budget. The monthly insurance cost then makes up 14% (R1,409), with running costs per month accounting for the final 5% (R493).

“Fuel spend accounts for 39% of the total, with the vehicle instalment cost at 42%. The figure to November 2022 indicates that the average monthly fuel spend, at R3,950, is almost on par with the vehicle instalment rate at R4,313,” said WesBank.

In contrast to 2018, where fuel accounted for 36% of a vehicle budget and instalments 44%, the 2022 basket shows the wide-reaching impacts of the massive fuel price increases the country endured over the last year.

Unfortunately, WesBank said this trend is likely to continue into 2023 due to sustained vehicle price inflation and “other industry constraints.”

Therefore, car buyers are urged to shop carefully so as to not overextend their finances by taking into account future changes in costs, such as potential interest rate hikes and higher fuel and part prices.

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