WesBank reports that despite the current and low interest rate, the savings generated from this does not necessarily leave vehicle owners with more money in their pockets.
The escalation of living costs over a broad spectrum of household items means that owners still have to consider the cost of vehicle ownership with care.
The number of people working from home has increased which means people travel less, too.
“Even if a car is being driven less frequently, fixed monthly payments such as the vehicle finance repayment terms and insurance costs, remain and need to be considered in the monthly household budget,” said Lebogang Gaoaketse, WesBank Motors head of marketing and communication.
“Looking at an average entry-level vehicle that travels approximately 2 500 kilometres per month, the monthly cost of the vehicle ownership basket, comprising of instalments, fuel, insurance and maintenance fees, has risen to R8 052,65 from R7 851,39 in 2019. This reflects a percentage increase of 2,56% year on year, and 30% higher than five years ago, when the monthly cost in 2015 totalled R6 192,88.”
Vehicle prices continue to rise above the inflation rate.
“Vehicle instalments and fuel spend remain the largest portions of the cost, accounting for 80% of the monthly spend. Fuel spend accounts for 33% of the total, with the vehicle instalment sitting at 47%. The figures for 2020 show monthly fuel spend averaged R2 698,50, while the instalment rate was significantly higher at R3 746,15.
“With vehicles being driven less since the first lockdown period last March, the average fuel spend is down 4% from 37% in 2015.
“The smartest move is to make provision for rising costs over the duration of the finance contract. Making use of a tool such as the WesBank Mobility Calculator makes financial sense, as it is there to assist consumers to gauge the total costs associated with vehicle ownership,” concluded Gaoaketse.