The salary you need to afford the cheapest car in South Africa

You will need to earn at least R20,000 per month to afford South Africa’s cheapest car on a finance plan, according to a calculation by TopAuto.

Renault recently updated the Kwid for South Africa, slashing its price tag from R196,999 to R178,799.

This makes it the cheapest car in South Africa, undercutting the Toyota Vitz by a mere R1.

The revamped Kwid is now available in three trim levels – Evolution, Techno, and Climber – with prices ranging from R178,799 to R222,999.

All versions are powered by a 1.0-litre petrol engine with 50kW and 91Nm, which can be paired with either a five-speed manual or five-speed automated manual transmission.

Equipment on the entry-level hatchback now includes LED daytime running lights, LED taillights, 14-inch steel wheels, central locking, a multi-information driver display, manual air conditioning, cloth seats, electric windows, rear parking sensors, two airbags, and an 8-inch infotainment screen with Apple CarPlay and Android Auto.

Higher-spec versions of the Renault will also add electric side mirrors, front fog lamps, roof rails, a rearview camera, and up to six airbags.

Each purchase comes with a 5-year/150,000km warranty, and a 2-year/30,000km service plan.

What you need to earn

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

• Car price – R178,799/R222,999
• Payment term – 60 terms (5 years)
• Interest – 10.50%
• Deposit – 0%
• Balloon – No balloon payment
• Extras – No optional extras

According to this, you’ll need to pay at least R3,938 per month for the Evolution, and up to R4,888 per month for the Climber Auto.

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 anywhere from R19,690 per month to R24,440 per month to afford the new Kwid on a finance plan.

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