The salary you need to afford Tata’s new hatchback in South Africa

You will need to earn at least R20,000 per month to afford the new Tata Tiago on a finance plan, according to a calculation by TopAuto.

Tata has officially re-entered South Africa’s passenger car market with a selection of four new vehicles, the cheapest of which is the Tiago hatchback.

The Tiago is available in three specifications with prices starting at R184,900, making it the third most affordable car in the country.

It runs on a 1.2-litre naturally aspirated petrol engine, which sends 63kW and 113Nm down to the front wheels.

The base XM trim is sold with a five-speed manual gearbox, while the higher-spec XT is available with a five-speed automated manual transmission (AMT).

Regardless of the version you go for, the Tata achieves an average fuel consumption of 5.0l/100km.

Standard equipment includes 14-inch steel wheels with covers, electric windows, manual air conditioning, fabric seats, a height-adjustable driver’s seat, ISOFIX child seat anchor points, a USB port, a 3.5-inch infotainment display, a digital instrument cluster, two speakers, ABS, corner stability control, two airbags, central locking, an immobilizer, and rear parking sensors.

Upgrading to the XT will then add a multifunction steering wheel, Bluetooth, two more speakers, electronic stability control, hill assist, a rearview camera, and a 7-inch touchscreen with Apple CarPlay and Android Auto.

Each purchase comes with a 5-year/125,000km warranty and a 2-year/30,000km service plan.

What you need to earn

We can use the following formula to work out the monthly payments on the new Tata:

• Car price – R184,900/R224,900
• Payment term – 60 terms (5 years)
• Interest – 10.50%
• Deposit – 0%
• Balloon – No balloon payment
• Extras – No optional extras

According to this, you’ll need to pay at least R4,069 per month for the XM, and up to R4,929 per month for the XT AMT.

Financial experts then recommend that you do not spend more than 20% of your gross monthly salary on vehicle payments.

This means you’ll need to earn anywhere from R20,345 per month to R24,645 per month to afford the new Tiago on a finance plan.

Note that this figure does not account for insurance, fuel, and maintenance, which must all be factored into your budget.