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The steep price of owning a car in SA: Cost of motoring ‘highest to date’

2018-08-21 20:00

Image: iStock

Do you know how much it costs to keep your car on the road every day? Data by vehicle finance specialists Wesbank shows that the average cost of owning a vehicle in South Africa has increased substantially. 

"The average costs of motoring has increased by approximately R940, or 14% in the last year, and 31% since 2013," according to the latest data from WesBank. 

We’ve included advice from the Automobile Association regarding car ownership at the end of this article.

What’s pushing up the price of motoring in SA?

Wesbank said: "Despite prevailing interest rates remaining at low levels and favourable vehicle price inflation, the rising cost of petrol and an increase in VAT from 14% to 15% have resulted in higher overall costs when looking at the total monthly cost of motoring. Vehicle instalments and fuel spend remain the biggest components, accounting for 80% of monthly mobility spend.

These costs are reflected by the WesBank Mobility Calculator, a tool the bank uses to track and calculate historic motoring costs. The total mobility basket comprises all fees that are involved with vehicle ownership: a monthly instalment, the insurance premium, fuel and maintenance.

Wesbank said: "Over time, these costs are updated to reflect prevalent inflation rates and fuel prices, with the sample vehicle price based on an average entry-level car that travels approximately 2500km per month."

Ghana Msibi, executive head of sales and marketing, WesBank, said: "International oil prices and local exchange rates continue to play a direct role in the monthly budgets for motorists, in both fuel and vehicle prices.  

"Although manufacturers are offering attractive marketing incentives to lure customers into dealerships, consumers still have to spend more on vehicles, fuel, insurance and maintenance than ever before."

Do you know the true cost of owning a car in SA

The Automobile Association (AA) says it is important for all vehicle owners to understand that the cost of owning a vehicle goes far beyond the cost of fuel.

The AA said: "Too many people assume the cost of the vehicle is the repayment of the loan (if they have one), and the cost of fuel. But, in reality, the cost of vehicle ownership extends further and vehicle owners must know exactly how much they are spending on their cars, and where it is going." 

The Association says things such as maintenance and service plans, instalment payments, and unexpected expenses such as cracked windshields and windows (which, for a small number of owners is covered by insurance, but even this may require excess payments), should also be factored into the total cost of ownership of a vehicle.
"If, for instance, your drive a small sedan at the coast, the total AA rate calculated on the vehicle may be R3.35 per driving kilometre which amounts to R67 000 if you drive 20 000km a year. An SUV driven inland over the same distance is going to be markedly more expensive – around R137 000 per year, R3.75 per day.

"But, importantly, this doesn’t only cover the cost of fuel, it also covers all costs associated with keeping the car on the road. People working on a budget, especially in these tough economic times, must keep a track of these expenses to ensure their vehicle is adequately covered financially at all times," the AA notes.

The AA says even though it may seem like a lot of work, knowing exactly how much you are spending on your vehicle – even when it is in your garage – is important to managing your vehicle’s expenses properly and, if needed, altering certain elements such as your routes and driving habits, to mitigate the impact of rising costs.
"Take the time to look at where you can make any savings, and do what you can to bring costs down. Even small savings build up over time and may save you thousands of Rands in the long run," the AA concludes.

Read more on:    wesbank  |  south africa  |  sa car sales

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