The budget car lie costing South Africans thousands of rands every month

Many South Africans buy cars they assume they can afford based on the monthly instalment alone, but these vehicles may cost them much more in the long run.

That is because the real cost of owning a vehicle includes additional costs like insurance, repairs, fuel costs, and levies, and not merely the repayment amount.

According to Mike Pashut, CEO of ChangeCars, cars that appear to be “affordable” upfront are often anything but that over time, adding that it is time buyers start asking what a vehicle costs to keep, not just to buy.

He explained that South Africans are often told to buy a car they can afford, but affordability is still largely measured through the purchase price or monthly instalment, while the true cost is becoming harder to see.

The proposed vehicle-linked fee to help fund the Road Accident Fund (RAF) could add another cost to annual vehicle licence disc renewals, while the RAF already receives nearly R50 billion per year through fuel levies.

Pashut said that asking motorists to pay more without first addressing the system’s failures will face resistance.

Modern vehicles are also becoming more technologically complex, as highlighted by the recent Ford Transit and Tourneo recalls for transmission defects that cause a sudden loss of motion.

“A feature-packed car may appear to offer exceptional value, but buyers must establish what those features could cost to insure, calibrate, repair or replace,” said Pashut.

“The affordable option is not necessarily the vehicle with the lowest instalment. It is the one whose full ownership cost remains manageable.”

The ChangeCars founder suggested South Africa implement a standard vehicle affordability disclosure detailing estimated insurance, service, tyre, technology repair, energy and tax costs alongside the instalment.

“Until then, buyers should stop asking only what a car costs to buy. They should ask what it could cost to keep,” he concluded.

What it costs to keep a car in South Africa

While most people believe they can afford monthly instalments on a new car, they fail to account for the fact that this is merely one piece of the cash flow puzzle when budgeting for a vehicle’s true cost.

Using the ownership costs associated with a 2026 VW Polo hatch, Naked Insurance illustrated that owning a new vehicle can set buyers back more than R10,000 per month.

“New 2026 Polos in SA are currently trading around R373,800 to R585,800, depending on specifications, and unless you’re paying cash, you’re definitely financing,” explained the insurer.

When buying the entry-level model, at 11.25% over 60 months, the monthly instalment comes to around R8,250, while real-world bank pricing may differ slightly.

Owning a car means nothing if you can’t afford to fuel it. At the Polo’s claimed 5.4l/100km and around R26 per litre of petrol, someone driving 1,000km monthly can expect to spend over R1,400 per month on fuel.

Next is insurance, which is compulsory when financing a car, and while car insurance is risk-dependent, the estimated cost to insure a Polo is anywhere from R1,100 to R3,000 per month.

Keeping a new vehicle in good condition is also crucial, which means budgeting for maintenance costs at 2% of the vehicle’s value per year for routine maintenance, and 3 to 5% per year for unexpected repairs.

This adds R7,476 per year for planned maintenance, and up to R18,690 per year for unplanned repairs, rising to as much as 10% to 15% of the car’s value per year for a 15-year-old car.

Adding all of these additional costs to the monthly instalment means budgeting for a monthly spend of over R12,000 to be safe.

According to Naked Insurance, just because the monthly number fits your budget, that doesn’t automatically mean buying the car is a smart financial decision.

“The reason is simple: cars lose value, consistently and predictably, because a car isn’t an investment in the usual sense,” the insurer explained.

“Technically, it’s an asset, but one you buy knowing upfront that it will be worth less over time.”

“In practice, car ownership is better thought of as the cost of having access to a car, not money you expect to grow or even hold its value.”