It costs 39.41% more per month in 2022 to keep a car on South African roads than it did in 2017, according to WesBank.
The finance house compared the running costs of an entry-level vehicle to the value of R250,000 that travels approximately 2,500km per month, which included the instalment, fuel, insurance, and maintenance costs on a monthly basis.
For the first three months of 2022, the average “total mobility cost” for this vehicle was approximately R9,356.80 per month, compared to R6,711.24 per month in 2017.
This is largely a result of rising fuel prices, interest rate hikes, parts shortages, and factory shutdowns over the past few years, as well as the ongoing unrest in Ukraine more recently, said WesBank.
The detailed running costs for this vehicle are detailed in the table below, as provided by WesBank:
“In 2021, vehicle instalments and fuel spend remained the largest portions of the basket, accounting for 79% of the monthly spend,” said WesBank.
The monthly insurance cost for 2021 then averaged a lower 16% of the total cost, with maintenance/running costs taking up a 5% slice.
The market followed a similar pattern in the years before, too, except for the 2019/2020 period that saw an anomaly in the data due to strict lockdown regulations, said WesBank.
What to expect in 2022
WesBank expects fuel costs and vehicle instalments to even out in 2022, each having an equivalent weighting of approximately 40% of the total cost of ownership.
“The projected figure for 2022 is further evidence of the wide-reaching impact of both global and local influences on the total cost of vehicle ownership,” it said.
“The monthly cost is predicted to be R9,356.80, which reflects a 21.27% annual increase and is a staggering 39.41% higher than in 2017.”
However, WesBank said this data is based on constantly shifting market conditions and is thus intended as a guideline only.
“Vehicle owners should take a holistic view when planning a car purchase and ensure that they don’t overextend by right-sizing the spend to fit the budget, including the fixed monthly instalment amount, insurance costs, fuel spend, and savings for maintenance and services,” said WesBank.
The budget should also account for increased costs that will likely be added down the line, such as a higher interest rate or fuel price increase, it said.
“The smartest move is to make provision for rising costs over the duration of the finance contract.”