The monthly cost of ownership for a vehicle with a selling price of R280,980 works out to approximately R11,529.
This not only includes the monthly finance payment, but also insurance, fuel, and maintenance provisions.
These figures were provided by finance house WesBank, which highlighted that many consumers forget to take into account the entire cost of ownership when shopping for a new set of wheels and mainly focus on the retail price and whether they can afford it.
“When purchasing a vehicle, many buyers focus solely on the retail price, but it is crucial to factor in the total cost of ownership to make an informed decision,” said Lebogang Gaoaketse, Head of Marketing and Communication at WesBank.
Taking a holistic view
A mid-range compact car with a retail price of roughly R280,980, such as the popular Chery Tiggo 4 Pro, will attract a monthly finance instalment of around R5,360.
This number is influenced by the current interest rate, as well as factors such as the contract length and your credit score.
If you are financing the vehicle, your lender will also require comprehensive insurance, which for a car of this calibre will cost in the region of R1,740.
“Insurance premiums vary depending on factors such as the car model, driver’s history, and location, and should be factored into monthly costs,” said Gaoaketse.
“Even if you are not financing, insurance is crucial for protecting your investment.”
Next, of course, is the all-important fuel your ride needs to run.
This mainly depends on your driving style, the vehicle’s engine specifications, and the terrain you travel most frequently, though you can estimate to pay around R3,950 a month on propellant at current rates.
One must also account for unforeseen maintenance and repairs, especially if the vehicle is no longer covered under any warranties or service plans.
For this wallet-friendly model drivers can budget an additional R479 per month, which should be enough to cover routine servicing, minor repairs, and general upkeep.
Combined, these costs tally up to a monthly expenditure of R11,529.
Keep in mind, however, that other, less frequent expenses also form part of the ownership experience.
You’ll have to renew the vehicle licence disc once a year which will add another few hundred rands to the tab, and once-off costs such as registration fees and licensing must also be considered.
Furthermore, owners should be aware of depreciation and how it affects the value of their cars.
“Depreciation can be one of the most significant costs associated with vehicle ownership,” said Gaoaketse.
“A car typically loses 15-20% of its value in the first year, affecting its resale price and overall cost of ownership.”
It’s therefore essential for consumers to recognise that owning a vehicle involves much more than just the retail price or monthly instalment.
“Understanding the full cost of ownership empowers buyers to make better financial decisions and maintain a more predictable budget,” concluded Gaoaketse.
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