The average projected total cost of vehicle ownership in South Africa in 2022 is set to surge to R9 356.80 a month, which amounts to a 21.27% increase on last year, and a staggering 39.41% jump on 2017 numbers, says WesBank.
The monthly fuel cost for this year is projected to be R3 780 a month, compared with R2 210.25 a month in 2017.
The monthly instalment due has also increased from R3 150.03 a month in 2017, to R3 779.28 a month this year.
WesBank says its total basket of monthly costs, released every year, comprises all the fees associated with vehicle ownership, namely the monthly instalment, a comprehensive insurance premium, fuel and maintenance fees.
These expenses are updated regularly to reflect current inflation and interest rates, and other fluctuating costs, says WesBank.
For the purpose of drawing up the comparison, WesBank uses an average entry-level vehicle (at a cost of about R250 000) that travels roughly 2 500 km a month.
Last year, vehicle instalments and fuel spend were 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 at 45%.
The figures for 2021 show that monthly fuel spend averaged R2 646, with the vehicle instalment at R3 438.
Monthly insurance cost was R1 274, or 16% of the cost, with running costs a month accounting for 5% of the costs, at R358.
This year, however, fuel spend and vehicle instalment costs are likely to have equivalent weighting, each accounting for 40% of the total.
Increased motoring costs have bolstered the emergence of new brands focused on more affordable models, together with the introduction of many new entry-level options from established brands in the South African market, says WesBank Motor marketing and communication head Lebogang Gaoaketse.
“These offerings also enable customers to tackle affordability at a lower price point, thereby lowering their monthly expenses, without sacrificing the benefits of new-vehicle ownership.”
“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,” adds Gaoaketse.
In March this year, the average value of a new vehicle financed through WesBank was R368 615, compared with March last year, when the figure stood at R356 343.
This reflects a 3.44% year-on-year average price increase for new vehicles, says Gaoaketse.
“Vehicle owners should take a holistic view when planning a car purchase and ensure that they don’t overextend,” he notes.
“[They should] right-size the spend to fit the budget, including the fixed monthly instalment amount, insurance costs, fuel spend and savings for maintenance and services.
“The budget should also make allowances for increased costs down the line, such as a higher interest rate or fuel price increase, as we are currently experiencing in 2022.”
* WesBank notes that the monthly vehicle ownership basket is based on data that constantly shifts in relation to market activity and is thus intended as a guideline only. The economic impact of Covid-19 over the past two years will have created an anomaly in relation to the 2019 data, so this should also be taken into consideration.