BusinessTech
More new cars are being sold in South Africa, with some consumers wanting to grab a new ride before the year ends.
A recent poll conducted by BusinessTech, which had a total of 7,500 responses, found that when asked if they had bought a car this year, 4,928 respondents answered that they have not and do not plan to, while 1,063 said they haven’t yet but are currently looking to.
761 people said that they had bought a brand-new car this year, and 752 said that they had purchased a second-hand car, reported the poll.
Vehicle sales data from the National Association of Automobile Manufacturers of South Africa (Naamsa) showed that in October when compared to a year before, there was an 11.4% increase in the number of cars sold.
Naamsa reports that domestic sales of new light commercial vehicles, bakkies, and minibuses increased by 1,590 units from 11,148 vehicles sold in October 2021 to 12,738 units sold in October 2022, or 14.3% more than the same month the previous year.
TopAuto reported that the most popular brands sold over October included Toyota in the top position with 12,500 sales, followed by Volkswagen in second with 4,900.
The most recent salary data from Statistics South Africa (Stats SA) revealed that average monthly earnings paid to employees in the formal non-agricultural sector saw a quarter-on-quarter increase of 3.7% from R23,697 in February 2022 to R24,578 in May 2022.
According to Kutlwano Mogatusi from vehicle financing firm WesBank, when you are considering purchasing a new car, you shouldn’t spend more than 25% of your total income on car repayments.
If you are making your purchase choices responsibly because it is what you can afford rather than what you desire, you are making the best life choices, said Mogatusi.
Here’s what you can afford
Based on the assumption that consumers don’t spend more than 25% of their gross monthly income on auto loans, BusinessTech examined what you can afford to buy with your monthly wage.
Westbank’s repayment calculator was relied upon for these calculations, as well as the assumption that there was a 0% deposit for car financing.
Any additional fees were also not included.
For purposes of these calculations, the cars are financed over five years (60 months) at an annual interest rate of 9.75%. This follows a recent interest rate hike by the South African Reserve Bank on 22 September, taking the prime rate from 9.00% to 9.75%.
Note: The below calculations are purely for comparison purposes and are not meant as financial advice.
Here is a list of cars you may currently purchase in South Africa at each of the indicated price points:
Between R16,000 – R20,000 per month
Suzuki S-Presso 1.0 GL – R156,900
Renault Kwid 1.0 Climber – R198,999
Earning R25,000
Toyota Urban Cruiser 1.5 Xi – R280,400
Volkswagen Polo Vivo hatch 1.6 Highline – R291,600
Between R25,000 – R42,000 per month
Hyundai i20 1.0T Fluid auto – R386,900
Volkswagen T-Cross 1.0TSI 85kW Comfortline – R432,200
Volkswagen Caddy 1.6 – R503,300
Between R42,000 – R84,500 per month
Volvo XC40 B3 Essential – R677,700
BMW 320d – R880,768
Audi A6 40TDI – R1,041,000
Upwards of R100,000
Mercedes-Benz GLS400d 4Matic – R1,958,893
Read: Deadline for property owners in Joburg – what you need to know
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