Payback periods for new passenger vehicles rising
The average payback period for new passenger vehicles is steadily increasing, says TransUnion business development director Nick Tuttelberg.
He says 53% of buyers are opting for a payback period of 61 to 72 months in 2013, compared with 42% in 2008.
Twenty-four per cent are settling their car debt in more than 72 months, compared with 4% in 2008.
Tuttelberg says asset financier WesBank has also reported a sudden increase in balloon payments this year, with the balloon payment itself also increasing.
The contract terms for used vehicles reflect a similar trend, with 55% of people opting for a payback period of 61 to 72 months, compared with 37% in 2008. Sixteen per cent aim to pay back their vehicles over more than 72 months, compared with 13% in 2008.
Used vehicle sales in the R1 to R200 000 band are also tapering off, compared with 2012, notes Tuttelberg, but sales in the R201 000 to R500 000-plus range are increasing.
The highest growth in new-vehicle sales is in the R500 000-and-above segment.
Fuel costs are growing fast, adds Tuttelberg, with monthly fuel costs almost as high as the car repayment.
According to a WesBank study, fuel costs made up 28.51% of total vehicle mobility costs in 2007. Monthly running costs were at 4.67% of total costs, monthly insurance at 14.66%, and the monthly net instalment at 52.13%.
In 2013, the monthly instalment makes up 43.46% of the monthly costs of operating a vehicle, with fuel costs at 37.75%. Monthly insurance is at 13.47% and monthly running costs at 5.3%.
This data was compiled using a mass- entry-level car costing R100 000 in 2007 (adding inflation every year), financed at prime +2% over 54 months with no balloon payment, with the vehicle travelling 2 500 km a month and consuming 7 ℓ of petrol per 100 km travelled.
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