iafrica.com Cost of owning your car on the rise!

Article By: Staff Reporter

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The overall cost of motoring is still on the rise, despite recent cuts to interest rates and fuel prices, as well as a slowdown in vehicle price inflation, according to experts at Wesbank.

In a statement released last week, a data report comprising information collected via a mobility calculator showed that the cost of instalments, fuel, insurance and maintenance had collectively increased the cost of owning a car by 24.2% in 4 years.

“Our mobility calculator gives consumers an idea of the total costs associated with vehicle ownership. 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.

The South African Reserve Bank (SARB) recently announced a Repo Rate cut of 25 basis points which spelled a positive outlook for with vehicle finance, home loans and credit cards to pay-off. However, the increasing cost of fuel, as well as increasing insurance and maintenance fees have played a role in spiking the cost of vehicle ownership.

For July 2017, the average cost of rose to R7 119.80; a good 6.1% higher than July last year, when the monthly mobility basket was R6 709.53.

An argument can also be made for the inflation of vehicle prices. With the rand weakening, it’s to be expected that vehicles will end up costing more in the long-term despite cuts to interest rates.

Consumers should therefore take advantage of cuts without banking on them to be financial life-savers. The one thing that can be planned for is fluctuation. Both overall prices and interest rates can change at the drop of a hat.

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