The average monthly cost of motoring has increased by about R940, or 14% in the last year, and a whopping 31% since 2013, this according to the latest data from vehicle and asset finance specialist WesBank.
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 installments and fuel spend remain the biggest components in the costs basket, 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: monthly installment, insurance premium, fuel and maintenance.
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 about 2 500 km a month.
“The past year has been a rollercoaster ride with drastic fuel price fluctuations making it difficult for consumers to keep track of monthly budgets,” says WesBank sales and marketing executive head Ghana Msibi.
“As a rule, we generally advise motorists to allow some breathing room in their budgets to help absorb these changing costs.”
Some good news is that WesBank’s data indicates a slowing in vehicle price inflation for new vehicles, which has had a favourable effect on purchase prices.
In July this year, WesBank’s average new vehicle financed deal was only 1.43% higher than the same time last year, at R307 445, while the average used vehicle finance deal was 6.9% higher than last year, at R216 309.
However, warns Msibi, 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.