The R650 per month difference paying for car insurance instead of petrol taxes

South African motorists could save up to R650 per month if the government scraps the Road Accident Fund (RAF) and reintroduces compulsory third-party car insurance.

In 1946, the Motor Vehicle Insurance Act 29 of 1942 took effect, making third-party insurance compulsory for all vehicles on South Africa’s roads.

By law, vehicle owners were required to purchase an annual insurance policy from approved private insurers, providing indemnity cover against liability for bodily injury or death caused to a third party.

The requirement for drivers to purchase individual statutory insurance policies was scrapped in 1986, when the South African government enacted the Motor Vehicle Accidents Act 84 of 1986.

This legislation shifted funding to a dedicated fuel levy, which extended statutory third-party injury protection to all road users without requiring them to pay private insurers.

The levy-linked system remains in place to this day after it was adopted by the Road Accident Fund, which commenced on 1 May 1997 to replace earlier transitional bodies.

Much of the reasoning behind the transition away from private insurance was that motorists were not able to afford monthly premiums, which is evident when considering that 70% of South Africans drive uninsured.

That said, third-party car insurance with low-cost insurers like Naked and Pineapple can cost as little as R70 to R170 per month for a basic entry-level option, and up to R499 per month depending on the insurer.

Upgrading to third-party, fire and theft cover, premiums generally range from R200 to R700 per month to add protection for your car against fire, explosions, and theft or hijacking.

Depending on how much a motorist drives, reintroducing compulsory third-party insurance and dropping the RAF levy could save South Africans thousands every year.

That is because a high-mileage motorist driving an 80-litre vehicle who fills up four times a month pays R8,640 per year into the RAF alone, excluding the General Fuel Levy (GFL) and other taxes.

Spending R720 per month funding the RAF

Because the average South African motorist drives between 1,250km and 1,750km per month, or 15,000km to 21,000km per year, they refuel roughly 1.5 to 2.5 full tanks per month, or fill up every 12 to 18 days.

Vehicle tank capacities tend to scale closely with engine size and fuel consumption, so most passenger vehicles achieve between 550km and 750km of driving range per full tank.

Urban commuters driving between home and work every day drive between 40 and 50km daily, which adds up to around 1,300km per month, requiring almost exactly two full tank refills per month.

High-mileage drivers, like sales representatives, can easily do over 2,000km per month and visit a filling station three or four times per month, roughly once a week.

Below is a breakdown of how much these motorists can contribute to the RAF by simply refuelling multiple times a month.

A motorist pays R67.50 on a 30l tank, R101.25 on a 45l tank, R135.00 on a 60l tank, and R180.00 on an 80l tank strictly toward the RAF levy, which quickly adds up to more than entry-level third-party insurance.

If South Africa went back to mandatory third-party car insurance, many local motorists would be paying less per month than they do with the RAF in place.