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Thursday / 20 June 2024
HomeFeaturesUber vs Buying the cheapest car in South Africa – Costs compared

Uber vs Buying the cheapest car in South Africa – Costs compared

It is cheaper to take ride-hailing services like Uber than it is to buy the cheapest vehicle in South Africa, the Suzuki S-Presso, depending on how far you drive every day.

In South Africa, on-demand transport is a viable alternative for many young car buyers who are faced with the harsh economic reality of high vehicle prices and substantial running costs, and evidence shows that even older generations are starting to adopt these technology-based mobility solutions in favour of traditional car ownership.

Platforms such as Uber, Bolt, and DiDi offer several benefits over and above having a car in your garage, including cost-effectiveness, convenience, environmental awareness, and social connectivity.

However, vehicle ownership brings a sensation of freedom and in South Africa in particular is regularly considered a status symbol.

Therefore, deciding on which transport option is best for your needs can be trickier than it seems.

The tipping point

According to Tracker, the tipping point between vehicle ownership and ride-hailing for South Africans lies at the intersection of financial affordability, lifestyle preferences, and evolving urban dynamics.

“Despite the allure of e-hailing, many young adults and first-time buyers aspire to car ownership as a symbol of independence and mobility,” said the car-tracking firm.

“However, economic constraints, exacerbated by factors such as student debt and uncertainty in the job market, may delay or deter their aspiration becoming reality.”

The table below, compiled by Tracker, compares the monthly traveling costs of a Suzuki S-Presso versus taking an Uber:

Distance travelled Car ownership Uber Go Uber X Uber Comfort
600km/month =  (20km/workday + 20km/weekend day) R6,688 R4,740 R5,640 R6,300
1,020km/month = (40km/workday + 20km/weekend day) R8,721 R7,092 R8,706 R9,660
1,440km/month = (60km/workday + 20km/weekend day) R10,753 R9,738 R12,108 R14,406

The cost of car ownership was calculated based on a vehicle price of R175,000 financed over 72 months at 13% interest and 10% residual.

The combined cost of petrol, maintenance, and insurance was assumed at R4.84/km. Other ad hoc expenses were also factored into the equation, including R200 for parking and R139 for tracking fees.

Uber rates were recorded across three service levels ranging from the most affordable “Go” option to the pricier “Comfort” and are reflective of the charges Joburg commuters could incur during work hours.

As evidenced by these calculations, you can save on costs when using ride-hailing services even if you travel around 1,400km per month, though past this it becomes more budget-friendly to get your own set of wheels.

Of course, if you were to purchase anything more premium than the least expensive vehicle in the country, Uber may prove to be the cheaper option even if you travel well over 1,000km every 30 days.

Tracker further highlights that after the finance contract expires, provided you diligently paid your dues, you will have a fully paid-off asset in the form of a car for which you may only need to cover running costs, with no such reward being possible should you go the Uber route.

Conversely, given the depreciation on vehicles, “if the differential between ownership and e-hailing were to be saved monthly into an interest-bearing investment, you may well have a more financially substantial asset after several years than an aged vehicle,” concluded the company.

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