The salary you need to afford a R225,000 crossover in South Africa

You need to earn at least R25,000 per month to afford a R225,000 crossover on a finance plan in South Africa, according to a calculation by TopAuto.

Tata recently launched the new Punch, which is one of the most affordable compact SUVs in the country, with prices ranging from R224,900 for the entry-level Pure+ up to R269,900 for the range-topping Accomplished+.

Buyers have a choice of two petrol engines, starting with a 1.2-litre naturally aspirated block with 65kW and 115Nm.

This is paired with a five-speed manual gearbox and results in an average fuel economy of 5.3l/100km.

Alternatively, there’s a more powerful 1.2-litre turbo unit that puts out 88kW and 170Nm and has a six-speed manual shifter.

Features on the affordable crossover start with LED headlights, 15-inch wheels, a multifunction steering wheel, a 4-inch digital driver display, air conditioning, a USB Type-C port, and an 8-inch media screen with wireless Apple CarPlay and Android Auto, and four speakers.

It also comes with assistance functions including cruise control, ABS, six airbags, hill assist, electronic stability control, traction control, tyre pressure monitoring, reverse parking sensors, and a rearview camera.

Higher trim levels will then add 16-inch alloy wheels, automatic headlights, rain-sensing wipers, push-button start, a leather steering wheel, blind-spot monitoring, a 360-degree camera system, automatic climate control, keyless entry, a wireless charger, a 7-inch driver display and 10.25-inch screen, a sunroof, and ambient lighting.

Each purchase includes a 5-year/125,000km warranty, a 2-year/30,000km service plan, and 24/7 roadside assistance.

What you need to earn

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

• Car price – R224,900/R269,900
• Payment term – 60 months (5 years)
• Interest – 10.75%
• Deposit – 0%
• Balloon – No balloon payment
• Extras – No optional extras

According to this, you’ll need to pay at least R4,957 per month for the Pure+, and up to R5,930 per month for the Accomplished+.

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 between R24,785 per month and R29,650 per month to afford the new Punch on a finance plan, assuming you don’t pay a deposit.

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