There are 26 passenger vehicles currently on the market that can be afforded with the average salary in South Africa right now.
According to Stats SA’s latest quarterly employment survey (QES) for the fourth quarter of the year ending December 2022, the average salary in South Africa is now R26,032 a month.
This is an increase of 4.5% from the previous quarter, where it was R24,813, and up 9.2% from the fourth quarter of 2021 at R23,828.
Data published by The University of Cape Town’s Liberty Institute of Strategic Marketing showed that a household needs to earn around R22,000 to be considered middle class in South Africa.
This would mean that the average formally-employed non-agricultural worker in the country would fit into that class category.
Notably, the South African Reserve Bank’s (SARB’s) Monetary Policy Committee surprised the market expectations on Thursday (30 March) by hiking the interest rate by 50 basis points – 25 points more than what economists and analysts forecasted.
The latest rate hike marks the ninth hike in the current cycle, with the total adjustment being 425 basis points since the hike cycle started in November 2021.
Rates are now at their highest point in 13 years (June 2009), when the fallout from the global financial crisis weighed on the local currency.
The recent rate hike means that those who earn the average salary can afford 26 vehicles currently on the market in South Africa.
This assumes that these individuals spend no more than 25% of their monthly income on vehicle-related costs, which is the recommended cap by industry experts.
This should apply to the whole vehicle expense, including:
- Vehicle instalments
- Insurance premiums
- Fuel costs
Below, BusinessTech looked at what you can afford to buy on the average salary in South Africa, assuming that people will not spend more than 25% of their gross monthly income on vehicle financing, which is approximately R6,500.
The calculations were made using Wesbank’s repayments calculator and include the assumption of a 0% deposit for car financing. They also exclude any additional fees incurred during the loan’s inception into the calculation.
Additionally, the cars are financed over five years (60 months) at an annual interest rate of 11.25% – following the rate hike by the SARB, taking the prime rate from 10.75% to 11.25%.
For those looking to spend the minimum on their car, the cheapest option on the market is the Suzuki S-Presso, with a starting price of R165,900.
Financing this car would require a monthly instalment of around R3,723 – close to 14% of the average monthly salary in South Africa.
However, those who find themselves able to spend close to the recommended limit can consider buying the VW Polo Vivo hatchback or the Toyota Urban Cruiser crossover SUV.
The Polo Vivo requires a monthly instalment of R5,932, while the Urban cruiser will cost slightly more at R6,288 monthly.
Financing these cars works out to around 23% and 24% of the average monthly salary in South Africa.
All the cars you can afford on the average salary in South Africa right now are listed below.
Suzuki S-Presso – from R165,900
Mahindra KUV100 – from R172,999
Suzuki Celerio – from R178,900
Renault Kwid – from R180,999
Suzuki DZire – from R193,900
Suzuki Swift – from R194,900
Hyundai Atos – from R199,900
Proton Saga 1.6 – from R199,900
Toyota Agya – from R200,000
Renault Triber – from R203,999
Suzuki Ignis – from R208,900
Kia Picanto – from R209,995
Renault Kiger – from R219,999
Honda Amaze – from R231,200
Suzuki Baleno – from R231,900
Toyota Starlet – from R233,000
Hyundai Grand i10 – from R246,900
Fiat 500 – from R249,900
Kia Pegas – from R254,995
Suzuki Ciaz – from R256,900
Suzuki Ertiga – from R258,900
Mahindra XUV300 – from R259,999
Suzuki Vitara Brezza – from R262,900
Toyota Rumion – from R265,800
VW Polo Vivo – from R266,900
Toyota Urban Cruiser – from R283,200
Read: South Africa may look to ban new petrol and diesel cars by 2035 – here’s why
