The True Cost of Owning a Car in South Africa

Most people budget for the car repayment and forget the rest. In reality, the repayment is often less than half the true cost of running a car in South Africa. Here is the full picture.

The full monthly cost breakdown

Depreciation — the invisible cost

A new car can lose 20–30% of its value in two years. On a R300,000 car, that is up to R90,000 gone — a cost you do not see monthly but pay when you sell or trade in.

How to reduce your true cost

• Buy a 2–3 year old used car to skip the steepest depreciation
• Shop around for insurance annually — it adds up
• Keep the car longer once it is paid off — those are your cheapest years
• Stay within the 15% repayment and 25% total-cost rules

Run your real numbers through the car affordability calculator, then check it fits your monthly plan with the lifestyle affordability calculator.

Why the sticker price and repayment are only the beginning

The purchase price or monthly repayment on a vehicle typically represents less than half of what car ownership actually costs over time once insurance, fuel, maintenance, licensing and depreciation are factored in. Budgeting on the repayment alone is one of the most common ways South Africans overextend their finances on a vehicle.

The full monthly cost, realistically broken down

Depreciation: the cost you do not pay monthly but still pay

A new vehicle typically loses 20-30% of its value within the first two to three years, a loss that is invisible in your monthly budget but very real when you eventually sell or trade in. This is one of the strongest arguments for buying a slightly used vehicle rather than new, letting the first owner absorb the steepest part of the depreciation curve.

Reducing your true cost of ownership

• Buy 2-3 year old vehicles to avoid the steepest depreciation
• Shop insurance annually rather than auto-renewing with the same provider
• Keep the vehicle longer once paid off — these become your cheapest years of ownership
• Choose a shorter loan term where affordable, to reduce total interest paid

Calculating your specific true cost

Use our car affordability calculator to see what you can sensibly finance, keeping the full ownership cost — not just the repayment — in mind.

Comparing total cost across different vehicle choices

When comparing two vehicles, resist comparing purchase price alone — a cheaper car with poor fuel economy or expensive parts can cost more over five years than a pricier but more efficient alternative. Total cost of ownership calculators, which factor in fuel, insurance, maintenance and depreciation together, give a far more accurate comparison.

Insurance costs vary substantially by vehicle model, even within similar price brackets, since insurers price risk based on theft rates, repair costs and typical driver profiles for that specific model — always get an insurance quote before finalising a purchase decision, not after.

Comparing total ownership cost across vehicle segments

A budget hatchback and a mid-size SUV can have monthly repayments that look deceptively similar, but their true ownership costs diverge sharply once insurance premiums (often 30-50% higher for the SUV), fuel consumption, and tyre replacement costs are factored in. Always compare total monthly cost of ownership, not just the advertised repayment, when cross-shopping between vehicle categories.

Factoring in resale value when comparing vehicles

Two similarly priced cars can have very different resale values after five years, meaningfully affecting their true cost of ownership. Researching typical depreciation curves for specific models, not just makes, is worth the extra research time before a major purchase decision.

Reviewing your insurance annually

Insurance premiums can vary significantly between providers for the same vehicle and profile. Reviewing and comparing quotes annually, rather than automatically renewing, is one of the simplest ways to reduce the true cost of ownership without changing the vehicle itself.