How much you need to earn to afford the cheapest cars in South Africa

The cheapest new cars in South Africa require buyers to earn just over R14,000 per month to “afford” the vehicles.

This is according to a calculation by TopAuto.

The cheapest new cars in the country are the Suzuki S-Presso 1.0 GL and the BAIC D20 Hatch.

They retail for R149,990 and R152,900, respectively.

Both cars offer small engines with low power, and a minimal set of comfort features.

The S-Presso packs a 1.0-litre petrol engine that is paired to a five-speed manual transmission, and produces 50kW and 90Nm.

The D20 is powered by a 1.3-litre petrol engine, generating 75kW and 128Nm, which is also paired to a five-speed manual transmission.

What you need to earn

To work out how much you need to earn to “afford” the two cheapest cars in the country, we must first calculate the monthly repayments when purchasing the vehicles using a finance plan.

This is done using the formula below:

• Car Price – Car Price (R149,990/R152,900)
• Payment Term – 60 terms (5 years)
• Interest – 9.5%
• Deposit – 10%
• Balloon – No balloon payment
• Extras – No optional extras

The result is the following monthly finance payments:

• BAIC D20 1.3 Comfort – R2,929 p/m
• Suzuki S-Presso 1.0 GL – R2,984 p/m

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

By applying this rule to the D20 and S-Presso, we reach the following monthly salaries required to “afford” the cars:

• BAIC D20 1.3 Comfort – R14,645 p/m
• Suzuki S-Presso 1.0 GL – R14,920 p/m

It must be noted that this calculation is for information purposes only, and does not constitute financial advice.