The true price of owning a car

29 May 2025

Most prospective buyers of a vehicle tend to focus on its purchase price when figuring out if it’s affordable. But there are many other factors to consider because they will inflate your monthly costs.

Having recently bought a new car, I’ve found it quite a big adjustment getting used to a vehicle loan instalment going off my bank account after not having to pay one for eight years.

That said, buying a car is about so much more than its financing. I found WesBank’s recent calculations about car ownership costs incredibly helpful. These calculations look at the estimated total monthly expenses associated with owning and maintaining one of the top-selling hatchbacks locally. The data also shows how the total cost of ownership has changed over time.

“Despite the recent improvement in passenger car sales, South Africa remains a price-sensitive market,” says Lebo Gaoaketse, head of marketing and communication at WesBank.

“This means when they decide to buy a car, new or used, most buyers base their decision primarily on the purchase price. But it’s important to look beyond just that and consider the total cost of ownership, which is influenced by several other factors.”

Cost breakdown

For a mid-range hatchback with a retail price of about R294,000, including VAT, you can expect to pay an estimated monthly instalment of R5,554.80. Cars in this price range include the Volkswagen Polo Vivo 1.4 Comfortline, Kia Picanto 1.2 EX manual, Suzuki Swift 1.2 GLX, Toyota Starlet 1.5 XS and the Fiat 500 Cult.

The instalment is influenced by the interest rate linked to the vehicle financing contract, which in turn is influenced by factors such as your credit score and the loan term. It’s important to note that the interest rate will vary between customers, depending on their credit profile.

Insurance options

If you’re financing your car through a bank, insurance is compulsory before you drive it off the showroom floor. But even if your vehicle is not financed, insurance protects you against losses that might result from an accident or theft.

Insurance premiums vary depending on factors such as the make and model of the car, as well as the driver’s history and location. For the model in question, a comprehensive insurance premium of R1,827.24 monthly can be expected.

It’s worth noting that even if you have comprehensive insurance, the amount you owe the bank includes interest and is usually significantly more than the value of the car, especially in the first four years of ownership.

Credit shortfall insurance is a valuable add-on to your policy. I made a point of letting my family know that I had taken this option in case I end up dying in a car accident, because I wouldn’t want them stressing about the debt. Nor would I want to be stuck paying off the debt if my car is written off.

Fuel costs

Fuel is one of the largest recurring expenses for car owners. Gaoaketse recommends that you estimate your monthly fuel costs, determine your car’s fuel consumption rate and the distance you travel each month.

The average monthly fuel costs for the vehicle in this scenario are R3,902.50. This is where your choice of car can make a massive difference. Although I didn’t have a car instalment previously, I was forking out between R4,000 and R6,000 a month on fuel – the “perk” of living two hours away from the city. Swapping my gas-guzzling SUV for a hybrid car has been an absolute game-changer, and the difference at the fuel pumps still astounds me two months later.

Continuing maintenance

Routine maintenance is important to ensure the safe and reliable operation of your vehicle. In the WesBank example, you could expect to pay in the region of R475.75 per month, or R5,709 annually, for running costs, including routine maintenance and general upkeep.

Total monthly mobility costs

When combining the monthly instalment, fuel, insurance and running costs, the total monthly cost for one of the bestselling hatchbacks in South Africa comes to R11,760.29 – marginally higher than the average total cost of ownership in 2024, which was R11,578.70 per month.

Historical data

Reviewing historical data, the increase in the total cost of vehicle ownership becomes apparent. For instance, because of vehicle price inflation, the estimated monthly instalment for the study model has jumped from R2,417.03 in 2012 to R5,554.80 in 2025. Insurance premiums have increased from R802.66 to R1,827.24 over the same period, and fuel costs have ballooned from R1,856.75 to about R3,902.50 per month.

“Viewing the cost of vehicle ownership from this perspective is important and underscores the need to objectively and honestly evaluate one’s affordability level before signing a long-term vehicle finance contract to ensure a fulfilling vehicle ownership experience,” says Gaoaketse. DM

PS the numbers in this story were hypothetical and not what Neesa Moodley is paying for her car.

This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.

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