Think you can afford that car? The monthly instalment doesn’t tell the full story

A car might fit comfortably into your finance application, but the monthly instalment is only the beginning of what it will cost you.

September’s fuel increase is another reminder that petrol, insurance, servicing, tyres and licensing all need to be factored into your budget before signing a vehicle finance agreement.

Petrol increased by R1.34 a litre on 2 September, adding R67 to the cost of filling a 50-litre tank.

For a household filling that amount four times a month, that’s an additional R268 without driving a single extra kilometre.

“Work out what the car will cost to keep on the road before deciding what you can spend buying it,” says Mike Pashut, CEO and Founder of CHANGECARS, who has more than 30 years of automotive experience. “Your budget needs room for an expensive month.”

How much will your car cost in fuel?

Start with how much you drive and the vehicle’s fuel consumption.

At September’s inland 95 petrol price of R26.92 a litre, travelling 1,500km in a vehicle using seven litres per 100km costs about R2,827.

A car using nine litres per 100km costs about R3,634 to cover the same distance.

That’s a difference of around R808 a month.

Advertised fuel consumption is useful for comparing vehicles, but buyers should also investigate realistic consumption for their usual commute.

Add insurance, tyres and servicing

Before buying, get an insurance quote for the exact model and check the excesses, tracking requirements and cover for how you intend to use the vehicle.

Find out how much replacement tyres cost and what you will pay for the next major service.

When buying used, arrange an independent inspection and verify the vehicle’s service history.

“A discount can disappear quickly if the car immediately needs tyres, overdue servicing or repairs,” says Pashut. “Ask what work is due next, and get the answer in writing.”

Don’t judge car finance by the instalment

Look beyond the advertised monthly repayment when comparing finance.

Consider the deposit, interest rate, repayment period, fees, total amount repayable and any final balloon payment.

A lower instalment created by extending the repayment period or leaving a large balance until the end does not necessarily solve an affordability problem.

If you’re trading in another vehicle, request its settlement figure before assuming the trade-in will clear what you owe.

Don’t confuse levies with car insurance

The Road Accident Fund levy increased by seven cents to R2.25 a litre in April.

Paying the RAF levy does not insure your vehicle against damage. The fund deals with qualifying injury and death claims, so motorists still need to understand their own insurance protection.

Motorists should also check official requirements when dealing with licence renewals and verify AARTO infringements through official channels rather than ignoring notices based on headlines about challenges to the system.

Leave room for an expensive month

Vehicle affordability should also leave space for unexpected costs.

“When money is tight, ask a qualified workshop to separate urgent safety work from items that can wait,” says Pashut. “Do not stretch worn tyres or ignore a braking problem to make the monthly figures work.”

Before buying, also check the safety equipment fitted to the exact derivative, including airbags and stability control, relevant crash tests and any outstanding recalls using the vehicle identification number.

Ultimately, the car you can afford isn’t simply the one with a monthly instalment that fits your budget.

It’s the one you can still afford to fuel, insure, maintain and keep safely on the road when an expensive month arrives.

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