Keeping your car on the road is set to cost a whole lot more
Wesbank predicts it will cost about R2,600 more per month to own and maintain an entry-level car than it did five years ago
WesBank has found that car owners are paying around R1,000 more per month to own and maintain an entry level vehicle than five years ago, but record fuel prices could more than double that figure this year.
The bank's Mobility Calculator tracks increases in instalments, insurance and maintenance costs, and fuel, with the latter accounting for the biggest cost increase due to recent fuel price hikes.
The bank used as an example an entry level vehicle priced at R250,000 (eg. a Polo Vivo 1.4 hatch) that travels approximately 2,500 km per month. The monthly cost of the vehicle ownership basket, comprising instalments, fuel, insurance and maintenance costs, has increased to R7,715 in 2021 from R7,583 in 2020 as a result of increases in interest rates and fuel costs.
While this reflects a percentage increase of 1.74% year on year, the 2021 average figure is 15% higher than five years ago, when the monthly cost averaged R6,711 in 2017.
In 2021, vehicle instalments and fuel spend remained the largest portions of the basket, accounting for 79% of the monthly spend. Fuel spend accounted for 34% of the total, with the vehicle instalment amount sitting at 45%. The figures for 2021 show monthly fuel spend averaged R2,646, with the instalment rate significantly higher at R3,438. The monthly insurance cost was R1,274 or 16% of the cost, with running costs per month accounting for 5% at R358.
This is comparable with the mobility basket in 2017, where fuel spend accounted for 33% of the total at R2,210 and the vehicle instalment for 47% at R3,150. There has been a similar pattern since. However, 2022 might see fuel spend and vehicle instalment costs having an equivalent weighting with each accounting for 40% of the total, says WesBank.
“The projected figure for 2022 is further evidence of the wide-reaching impact of both global and local influences on the total cost of vehicle ownership,” says says Lebogang Gaoaketse, WesBank Motor head of marketing and communication.
“The monthly cost is predicted to be R9,357, which reflects a 21.27% annual increase and is a staggering 39.41% higher than in 2017.”
“The past two years have seen many people working from home, thus saving on motor vehicle costs such as fuel and maintenance with reduced usage. However, getting back on the road and having to manage the actual costs of vehicle ownership now also need to be factored into what is for many an already constrained budge,” he says.
The bank says the Covid-19 pandemic has dealt its own share of harm to the automotive industry, with the consequences still being felt today. Factory shutdowns, suspended manufacturing and semiconductor chip shortages have hampered regular production, while the Ukraine conflict has served up a host of unforeseen impacts.
“As a result of vehicle price inflation over the past year, consumers have spent more on average for new and used vehicles in 2021, and this trend is likely to continue into 2022. In March this year, the average value of a new vehicle financed through WesBank was R368,615 compared to March 2020 when the figure stood at R356,343. This reflects a 3.44% year on year average price increase for new vehicles,” says Gaoaketse.
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