WesBank says that its data suggests the average overall cost of motoring is rising fast, despite recent cuts to interest rates and fuel prices, as well as a slowdown in vehicle price inflation.
The credit provider’s monthly mobility basket – which comprises vehicle instalments, fuel, insurance and maintenance costs – has increased 24,2% since July 2013.
WesBank says it tracks these costs monthly, regularly updating the data set to include rising vehicle prices, inflation, interest rate changes, as well as other fluctuating costs based on the cost of ownership for an entry-level vehicle that travels 2 500 km per month.
The company says that for July 2017, the average monthly cost of motoring in South Africa has risen to R7 119,80, which is 6,1% higher than July last year, when the monthly mobility basket was R6 709,53.
Compared to four years ago, the total cost of motoring is now 24,2% higher, says WesBank, with July 2013’s monthly costs having amounted to R5 732,64.
“Seeing how these costs increase over time really helps people identify how important it is to budget properly and plan for the future,” said Rudolf Mahoney, head of brand and communications at WesBank.
“For example, an entry-level car that cost R100 000 in 2007. Today, that same entry-level car costs more than R183 000 – and the associated costs have also increased.”
WesBank says vehicle instalments and fuel spend remain the biggest portions of the monthly mobility basket, however, insurance premiums, vehicle instalments, and maintenance costs account for the highest increases over the past five years, mainly as a result of vehicle price inflation.
Between 2013 to 2017, rising interest rates and higher new vehicle prices saw instalments increase 43,8%. Rising vehicle prices also resulted in higher insurance premiums, which grew 38,6% over the same period, WesBank’s data suggests.
In addition, the average new vehicle financed through WesBank cost R300 181 in June 2017, while the average used vehicle cost R202 796.
While instalments, fuel, and maintenance costs have increased consistently, average monthly fuel spend has actually declined over the last two years. When viewed as a portion of the monthly motoring budget, fuel spend accounts for 31% in July this year. This contrasts with 34% in July 2016, and 39,7% in July 2013.
“Fuel prices are influenced by the exchange rate and the international price of oil, with general inflation playing a far smaller role,” said Mahoney. “In 2013 and 2014, fuel prices were on the rise and the monthly fuel spend was roughly equal to a small vehicle’s instalment. This is no longer the case, but it doesn’t mean the cost of motoring is lower.”
