When purchasing a vehicle, most of us would hone in on the purchase price. That’s predominantly because buying a car is a retail experience, and for the most part, retail purchases do in fact end at the price tag. Sure, you could argue that when you buy a blender you’re also paying for the electricity and food items required to use that blender, but it’s just not usual to think that way.  

However, when it comes to buying a vehicle, the additional costs associated with car ownership simply can’t be overlooked. We would go so far as to say that understanding the total cost of car ownership is crucial for making an informed financial decision around which vehicle to buy.  

To shed more light on the impact that buying a car can really have on your finances, let’s explore the various costs involved in owning a car in South Africa, including insurance, maintenance, fuel, and depreciation. 

Use These Tools To Calculate Your Costs 

Before looking at the different costs, let’s highlight the different tools that will be useful to you as you calculate the costs of car ownership. 

• Free Vehicle Valuation Report – Check the value of the car you want to buy to make sure you’re not paying too much.  

• AA Insurance Supermarket – Compare up to 7 quotes to get the best cover at the best price. 

• AA Warranty – This covers the cost of repairs and replacements if your car unexpectedly breaks down. 

• Trip Fuel Cost Calculator – Tells you how much it will cost you to drive over a certain distance, using current fuel prices plus the vehicle’s fuel efficiency. 

• Fuel Consumption Calculator – Helps you estimate how much fuel a vehicle will use at different distances. 

1. Those Extras (it’s not just the purchase price) 

The purchase price is the most obvious cost associated with car ownership. The price you pay will vary wildly depending on your preferences, including whether you’re buying new or used. New cars are naturally more expensive, not least because there’s absolutely no immediate need for maintenance and repairs. On the other hand, used cars, while more affordable, may require more maintenance and repairs and so the cheaper price could mean bigger additional expenses. 

If you’re looking at the secondhand market, make sure to use our Free Vehicle Valuation Report so you can check that you’re paying a fair price.  

You should also consider these additional fees: 

• Licensing And Registration Fees: These fees are required annually but the amount isn’t standard – it depends on your vehicle’s value and type. 

• Parking And Tolls: If you frequently park in paid areas or use toll roads, calculate these as part of your monthly costs. 

• Accessories And Modifications: If you plan to add accessories, have any repairs done, or make modifications to your vehicle before you drive off, include these costs in your overall budget. 

2. Factor In The Insurance Costs 

Before you buy a car, it’s always a good idea to shop around for at least three insurance quotes (to make sure you get the best price), which you can find using the AA Insurance Supermarket.  

The reason why you would want to compare quotes for the vehicles that you’re interested in is because the cost of insurance varies based on several factors. Specifically, we’re talking about the level of cover that you get and the make, year, and model of the vehicle.  

By adding the potential insurance premium to your repayment instalments, you will be closer to knowing what it will cost to own your car every month.  

A few tips when it comes to car insurance: 

• Shop Around – Don’t take the first quote you get, because it might not offer you what you need at the price you can afford. 

• Your Needs – Comprehensive vs. Third-Party Insurance: You get very cheap policies, like third party only, which only covers damage to another vehicle or property, but not your vehicle, but if you need more cover, then comprehensive insurance covers the most risks, from theft and hi-jacking to damage to your vehicle (even damage you cause accidentally) and third-party liability. 

• Bundle Discounts – Some insurers will give you a discount if you keep both your home and car insurance under the same roof, so you may want to consider staying with your current insurer who manages your other risks. 

• Excess Amount: The excess is the amount you must pay out of pocket when making a claim. A higher excess can lower your monthly premiums, but you will have to pay this amount if you ever claim.  

3. Maintenance And Repairs 

It goes without saying that regular maintenance is essential for keeping your vehicle in good condition, as well as preventing costly repairs further down the line. According to the AA, South African motorists should budget approximately R3,000 to R5,000 annually for routine maintenance, which includes oil changes, brake inspections, and tyre rotations. 

Even if you have a service plan to ensure optimal performance and maintain your warranty, you may still incur unexpected costs. That’s why you should consider setting aside a budget for unexpected repairs, as these can arise at any time. Better yet, get an AA Warranty to cover those costs on your behalf. 

4. Monthly Fuel Costs 

Outside of the repayment amount and insurance premium, fuel is one of the most significant ongoing expenses for car owners. The price of fuel fluctuates based on market conditions, but as of recent reports, the average price of petrol in South Africa is around R24 per litre.  

To estimate your monthly fuel costs, consider the following: 

• Fuel Efficiency: Calculate the vehicle’s fuel consumption (litres per 100 km) and your average monthly driving distance to determine how much you’ll spend on fuel. 

• Fuel Expenditure: Calculate what it’ll cost you to go between your usual destinations on a daily basis in order to gauge an estimate of your monthly fuel usage. 

• Driving Habits: Your driving style can impact fuel efficiency. Aggressive driving, frequent acceleration, and heavy braking can lead to increased fuel consumption. 

We have two great tools you can use – the Trip Fuel Cost Calculator and our Fuel Consumption Calculator. 

Feeling Informed? 

We trust that in being presented with all the associated expenses you can develop a realistic budget that ensures your vehicle remains a valuable asset rather than a financial burden. We also hope that all the tools we’ve linked will help you make the right choice and enjoy the benefits of car ownership while managing your expenses effectively.