2018 – the most expensive time to own a vehicle…
According to a recent report by WesBank the cost of vehicle ownership in South Africa is up by a staggering R940 in the past year, making it the highest to date.
The average costs of motoring have increased by approximately R940, or 14% in the last year, and 31% since 2013 according to the latest data from WesBank.
Despite prevailing interest rates remaining at low levels and favourable vehicle price inflation, the rising cost of petrol and an increase in VAT from 14% to 15% have resulted in higher overall costs when looking at the total monthly cost of motoring. Vehicle instalments and fuel spend remain the biggest components, accounting for 80% of monthly mobility spend.
Also read: What is your car costing you daily?
These costs are reflected by the WesBank Mobility Calculator, a tool the bank uses to track and calculate historic motoring costs. The total mobility basket comprises all fees that are involved with vehicle ownership: a monthly instalment, the insurance premium, fuel and maintenance. Over time, these costs are updated to reflect prevalent inflation rates and fuel prices, with the sample vehicle price based on an average entry-level car that travels approximately 2500km per month.
“The past year has been a rollercoaster ride with drastic fuel price fluctuations making it difficult for consumers to keep track of monthly budgets,” says Ghana Msibi, Executive Head of Sales and Marketing, WesBank. “As a rule, we generally advise motorists to allow some breathing room in their budgets to help absorb these changing costs.”
WesBank’s data also indicates that the change in vehicle price inflation for new vehicles has had a favourable effect on purchase prices. In July this year, WesBank’s average new vehicle financed deal was only 1.43% higher than the same time last year at R307 445, while the average used vehicle finance deal is 6.9% higher than that of last year at R216 309.
“International oil prices and local exchange rates continue to play a direct role in the monthly budgets for motorists, in both fuel and vehicle prices,” said Msibi. “Although manufacturers are offering attractive marketing incentives to lure customers into dealerships, consumers still have to spend more on vehicles, fuel, insurance and maintenance than ever before.”