Bad news for anyone who can’t pay cash for a car in South Africa

Buying a car in South Africa has become significantly more expensive over the past decade, with the overall cost of ownership costing R1,705 more per month than it should. 

A new study by WesBank highlighted the growing financial pressure on consumers, as many feel the pinch when affording and maintaining a vehicle.

South Africa has experienced a constant influx of new vehicles on the market, with more variety than ever. However, this growing selection doesn’t ease the financial burden.

According to Lebo Gaoaketse, Head of Marketing and Communication at WesBank, despite the recent improvement in passenger car sales, South Africa remains a price sensitive market.

He stressed that buyers tend to focus heavily on the sticker price when in reality, they should consider the full cost of ownership before making a purchase.

To help buyers better understand the real financial commitment of owning a car, WesBank calculated the monthly costs of one of the country’s best-selling hatchbacks, currently retailing for around R294,000 including VAT. 

“Based on this, buyers can expect a monthly instalment of approximately R5,554.80,” WesBank said. 

This figure is influenced by the interest rate on the vehicle finance contract, which depends on the buyer’s credit profile and loan term.

However, the purchase price and monthly instalment are only part of the equation.

Comprehensive insurance, which is mandatory for financed vehicles and strongly recommended even for those bought outright, adds another layer of cost. 

Insurance premiums vary widely, but WesBank estimated a monthly insurance bill of about R1,827.24 for the car in question. Fuel also remains one of the most significant and ongoing costs. 

Even with recent price relief at the pumps, WesBank calculated an average monthly fuel spend of R3,902.50 for this hatchback, based on typical usage patterns. 

On top of this, routine maintenance and running costs contribute an estimated R475.75 each month, or about R5,709 annually, for general upkeep.

Above inflation increases

When all these expenses are added together, including the instalment, insurance, fuel, and maintenance, the total cost of owning this vehicle will be around R11,760.29 per month in 2025. 

This is slightly higher than the average monthly ownership cost in 2024, which was R11,578.70. Looking back over the past decade, the sharp rise in ownership costs becomes even clearer. 

In 2012, the same car would have cost an estimated R2,417.03 per month in instalments, R802.66 in insurance, and R1,856.75 in fuel. 

In total, excluding maintenance, the monthly cost of owning the vehicle was around R5,076.44 in 2012. 

Fast forward to 2025, and that same figure has climbed to R11,284.54, an increase of R6,208.10 or 122%, which far outpaces the official inflation rate of 88.7% over the same period.

This trend is not isolated to one vehicle or market segment. TransUnion’s Vehicle Pricing Index confirmed that South Africans are feeling the financial squeeze across the board.

According to the report, the average vehicle loan amount has risen significantly over the past four years, from R329,796 in the fourth quarter of 2020 to R401,027 by the end of 2024, an increase of R71,231.

Gaoaketse emphasised that this sharp rise in vehicle-related expenses highlights the importance of making informed financial decisions. 

“Viewing the cost of vehicle ownership from this perspective is important and underscores the need to objectively and honestly evaluate one’s affordability level,” he said. 

“This needs to be considered before signing a long-term vehicle finance contract, to ensure a fulfilling vehicle ownership experience.”