What Car Can You Afford on South Africa’s Average Salary?
South Africa, our beloved Mzansi, sometimes feels like an economic roller coaster. With every peak there seems to be two troughs, and sometimes you’re just hanging upside down, waiting for someone to rescue you.
So, when it comes to big spends like buying a car, what you want doesn’t always match what you can afford. Here’s what cars you can get on the average SA Salary.
🍔 How Much Do Most of Us Make, Anyway? (2024 Edition)
Let's chat numbers.
South Africa has the highest unemployment rate in the world, with 32.9% of South Africans unemployed in 2024, you could argue that the national average wage is realistically close to zero. The hard, cold fact is that owning a car is impossible for most South Africans.
For those of us lucky enough to be employed, Stats SA’s quarterly employment survey (QES) offers figures on the average earnings.
According to their latest update, the average income in South Africa is R25,304 per month, or R303,648 per year. Once SARS takes its cut that’s about R21,475 per month or R257,709 a year.
🚘 How Much of That Salary Goes to the Car?
Most of us don’t have a couple hundred thousand rand in cash to spend on a car, which is why South Africans generally take out car finance to buy their wheels.
Lending institutions like banks don’t want to give out loans that people can’t afford. It’s bad for them because they risk not getting their monthly repayments. It’s also bad for you because you’ll be going into debt trying to pay off a car you don’t have the money for.
To avoid this, most banks specify that you shouldn’t spend more than 25% of your monthly salary on car payments. So, if you’re somewhere in the average salary range, that means you could theoretically spend a maximum of R6,326 on monthly car payments.
Reality Check on New Cars
But wait, remember that all loans have interest. The average earner could look at borrowing a maximum of R247 848 if they get a 12.75% interest rate (according to Cars.co.za’s affordability calculator), paid back over 72 months.
Remember that a car costs more than just the repayment you make on it each month. There are also insurance costs and fuel costs. You can find out how much insurance you would need to pay for your new car by comparing quotes from up to 11 car insurance companies at hippo.co.za. Fuel costs will depend on how much and how far you travel.
🚗 Some of the New Cars South Africa's Average Earners Could Afford
With all that said, what car can the average South African salary earner afford? It turns out, some pretty good ones!
The vehicle price range mentioned below is accurate at the time this was written but will change over time. You can treat these as rough estimates rather than the final say when you're considering these financial commitments.
We’ve also included the insurance premiums you may expect to pay for these car models – both the average and the lowest accepted premium:
| Car Model | Average Price | Average Accepted Insurance Premium | Lowest Accepted Insurance Premium |
|---|---|---|---|
| Renault Kwid | R197,000 - R228,000 | R1,097 | R318 |
| Nissan Magnite | R232,000 - R366,000 | R1,371 | R480 |
| Kia Picanto | R235,500 - R300,000 | R1,055 | R187 |
| Citroen C3 | R230,000+ | R1,290 | R216 |
| Nissan NP200 | R212,000 - R266,000 | R1,035 | R240 |
| Hyundai Grand i10 | R214,900 - R323,000 | R847 | R256 |
| Renault Triber | R204,000 - R265,000 | R1,338 | R377 |
| Honda Amaze | R231,200+ | R1,437 | R484 |
| Renault Kiger | R229,000+ | R1,347 | R413 |
| VW Polo | R262,700+ | R1,339 | R180 |
| Chery Tiggo 4 Pro | R280,000 - R408,900 | R1,450 | R265 |
| Toyota Vitz | R190,000+ | R1,184 | R447 |
Check out our South African Car Guide for a broader overview of our local car landscape.
🚙 How About Those Second-Hand Deals?
Of course, if you go second-hand your horizons broaden. Used cars could be where the action is at. You could afford brands like Ford, Chevy, Suzuki, Volkswagen, Renault, Hyundai, Mahindra, KIA, Fiat, and more.
Cars like a 2015 Audi A1 or Ford EcoSport may fit the budget. But be smart about checking them out. Sometimes, cheaper upfront can mean more rands spent down the line on repairs or extra costs.
🤷 So, Where Does That Leave Us?
Navigating SA’s economy and dreaming of a new car? It’s about balancing those dreams with the everyday reality of your debit orders and expenses. Weighing what the bank says you can afford with your true disposable income. And how much you're willing to spend on the overall vehicle expenses (not just the buying price). And, of course, comparing offers, so you can be sure you get the best deal possible.
Here's to being in a shiny new Vitz (or whatever floats your boat). If you can afford it, of course.
Sources:
South Africa has the Highest Unemployment Rate in the World as Jobs Bloodbath Continues
What is The Average Salary in South Africa in 2024?
*Based on Hippo’s data from July 2024
The information provided in this blog, does not constitute financial advice, please speak to a financial advisor if you need specific financial advice.
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