Sat, Dec 14, 2024
No menu items!

HomeiMoto AdviceTotal cost of owning a car

Total cost of owning a car

Consumers are encouraged to consider the total cost of owning a car when making purchase decisions

When purchasing a vehicle, many buyers focus solely on the retail price, but it is crucial to factor in the total cost of ownership to make an informed decision. WesBank has calculated estimated full monthly expenses associated with a popular compact car, giving consumers a detailed look at what to expect when budgeting for their next vehicle. These costs are reflected in the WesBank Mobility Calculator, a tool that tracks and calculates motoring expenses. Expenses are updated regularly to reflect current inflation and interest rates, and other fluctuating costs.

Beyond the vehicle’s price tag, the additional costs of vehicle ownership include depreciation, loan interest, insurance, fuel, maintenance, and repairs. By considering these extra costs, customers can budget appropriately when deciding on a new car and avoid any potential financial difficulties and pressures associated with their purchase.

Cost breakdown

For a mid-range compact car with a retail price of R280 980.11, including VAT, consumers can expect to pay an estimated monthly instalment of R5 360.13. This monthly instalment is influenced by the interest rate on your vehicle finance which in turn is influenced by factors such as credit score and loan term.

Insurance

If you are financing your vehicle, your lender will require comprehensive car insurance. Even if you are not financing, insurance is crucial for protecting your investment. Insurance premiums vary depending on factors such as the car model, driver’s history, and location, and should be factored into monthly costs. For this model, monthly comprehensive insurance premiums are approximately R1 739.74, providing essential protection against accidents and unforeseen incidents.

Fuel costs

The cost of fuel is a major ongoing expense. To estimate your petrol or diesel costs, determine your car’s fuel consumption and the distance you travel each month. The average monthly fuel costs for the vehicle under this scenario is R3 949.75.

Ongoing maintenance

Routine maintenance and upkeep are a reality of vehicle ownership. For this model, drivers can expect to pay an additional R478.82 per month for running costs, covering routine servicing, minor repairs, and general upkeep.

Total monthly mobility costs

When combining the monthly instalment, fuel, insurance, and running costs, the total monthly cost for this compact car amounts to R11 528.44. By considering these factors, drivers can plan their finances more accurately and avoid unexpected expenses.

Other costs to consider

  • Depreciation: Vehicles lose value over time. Depreciation can be one of the most significant costs associated with vehicle ownership. A car typically loses 15-20% of its value in the first year, affecting its resale price and overall cost of ownership.
  • Annual expenses: Even if your vehicle comes with a service plan, budgeting for consumables like brake pads, wiper blades, and tyres is necessary. These maintenance costs typically average around 2% of the car’s value annually.
  • Vehicle licensing: This is an annual cost that varies depending on the vehicle’s type and model. Be sure to include this when calculating your yearly expenses.
  • Once-off fees: Vehicle purchases include once-off costs like registration fees, and licensing. While these costs vary depending on the vehicle’s make, model, and region, they are essential to factor into your budget.

 Making smarter financial decisions

It is essential for consumers to recognise that owning a vehicle involves much more than just the retail price or monthly instalment. Understanding the full cost of ownership empowers buyers to make better financial decisions and maintain a more predictable budget.

“At WesBank, we understand that buying a car is a significant financial commitment, and it is crucial to consider all aspects of ownership, not just the initial purchase price,” says Lebogang Gaoaketse, Head of Marketing and Communication at WesBank. “By taking a holistic view of the costs involved, we help our customers make more informed decisions and prepare them for the full scope of vehicle ownership.”

RELATED ARTICLES
- Advertisment -

Most Popular