Features / 4 July 2024 / Michael Taylor

Every new car you can buy in South Africa under R5,000 per month

There are only seven new cars that you can purchase in South Africa using a finance plan with a payment of under R5,000 per month.

It’s no secret that car prices have shot up over the last few years, as more than 73% of all the vehicles on sale locally now have a starting price of over half a million rand.

Even models that were once considered budget options like the Kia Picanto have seen a staggering 55% increase in just four years, leaving the entry-level market with very few options.

While the price of a new set of wheels has risen at an alarming rate, salaries have been much slower to keep up, as the average formal sector income is currently set at around R25,000 per month in South Africa.

Financial institutions recommend that a good rule of thumb for determining your car-buying budget is to not exceed 20% of your salary for the monthly instalments if you opt for a finance plan, which gives us R5,000 to work with.

We can use the following formula to calculate our price cut-off based on this figure:

Payment term – 60 terms (5 years)
Interest – 11.75%
Deposit – 0%
Balloon – No balloon payment
Extras – No optional extras

According to this, we cannot exceed a purchase price of R224,000 for a new car.

Luckily, there are still at least seven models that can be bought for less than this, including five hatchbacks and two sedans.

Suzuki accounts for more than half of the listed options, illustrating the brand’s commitment to affordability, while Toyota, Proton, and Renault all have one model.