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How much you can afford to spend on a car – Based on your salary

Financial experts recommend that you do not spend more than 20% of your gross monthly salary on vehicle finance payments.

For example: If you earn R20,000 per month before tax and other deductions, you should not spend more than R4,000 per month on vehicle instalments.

This formula is a rough guideline only, however, and does not take into account your other monthly expenses – think bond payments, medical aid, and retirement savings.

Additionally, it does not factor in the cost of car insurance or fuel, which can add several thousand rand per month to your total cost of vehicle ownership.

How much you can spend

To provide a guide of how much you are advised to spend on vehicle finance payments using the “20%” rule, we created the table below.

The table provides an overview of how much you should spend on a vehicle instalment, based on your monthly gross salary.

It also includes the price of the car you can afford with this instalment.

It must be noted that this is not intended as financial advice.

Car Price Monthly Instalments Required Salary
R100,000 R1,962 R9,810
R200,000 R3,830 R19,150
R300,000 R5,698 R28,490
R500,000 R9,435 R47,175
R750,000 R14,105 R70,525
R1,000,000 R18,776 R93,880
R2,000,000 R37,459 R187,295

Monthly payments

To calculate the price of the car you can afford with a particular monthly instalment, we used the formula below.

  • Car Price – Total Price
  • Payment Term – 60 terms (5 years)
  • Interest – 9%
  • Deposit – 10%
  • Balloon – No balloon payment
  • Extras – No optional extras

Examples of cars

The list below details the new cars you are able to purchase in the various price brackets.

Bajaj Qute – R75,000

Hyundai Grand i10 – R199,900

Haval Jolion – R299,900

Mazda CX-30 – R499,000

Ford Ranger Thunder – R744,100

BMW 420i Gran Coupe – R937,452

Range Rover Sport HSE – R1,988,600



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