The average cost of motoring increased by 14% in the last year – and by 31% since 2013, according to data released by finance house WesBank.
In a statement, the finance house points out that despite favourable vehicle price inflation and interest rates remaining at low levels, the increased cost of fuel and the raising of the VAT rate from 14% to 15% contributed to the higher cost.
“Vehicle instalments and the cost of fuel remain the biggest components of monthly mobility spend, accounting for 80% of the total,” the statement says, citing WesBank’s Mobility Calculator, a tool the bank uses to track and calculate motoring costs.
The statement explains that the total mobility basket comprises all fees that are involved in vehicle ownership – a monthly instalment, the insurance premium, fuel and maintenance, based on costs accumulated by an average entry-level car that travels 2 500km a month.
Ghana Msibi, Executive Head of Sales and Marketing, said the past year had been a rollercoaster ride for motoring consumers, with fuel price fluctuations making it difficult to keep track of monthly budgets.
“International oil prices and local exchange rates continue to play a direct role in monthly budgets for motorists, in both fuel and vehicle prices,” said Msibi. “Though 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.”
However, he added that WesBank’s data indicated that the change in vehicle price inflation for new vehicles had had a favourable effect on purchase prices.
“In July this year, WesBank’s average new vehicle financed deal, at R307 445, was only 1,43% higher than that during the same period last year, while the average used vehicle finance deal was 6,9% higher at R216 309.”
According to a recent survey by the Automobile Association, almost 40% of motorists polled said they didn’t know how much it cost to own and run a vehicle.
“There are many variables which determine the amount of money spent on a vehicle daily, weekly, monthly and annually. It is important for vehicle owners to understand these variables and, if necessary, manage them better to ensure they do not overspend,” the organisation said in a statement.
According to the AA’s calculations, the total cost of keeping a small sedan on the road – if driven at the coast – is R3,35 a kilometre, amounting to R67 000 if the vehicle is driven 20 000km a year.
“An SUV driven inland over the same distance is going to be markedly more expensive – around R137 000 a year, or R3,75 a day,” the association said. “People working on a budget – especially in these tough economic times – must keep a track of these expenses to ensure their vehicles are adequately covered financially.
“Make sure you calculate all the variables such as tyres, services, insurance and, in the case of motorbikes, replacement gear, into your monthly budget. Doing this will give you a more accurate picture of the cost of owning the vehicle, even when it is not being used.”