Budgeting for Car Ownership in South Africa

Owning a car comes with a lot more expenses than just the purchase price or monthly loan instalment. If you're a first-time car owner in South Africa, it's vital to understand and budget for the total cost of ownership – those recurring costs like fuel, insurance, maintenance, and more that come with keeping your car on the road. This guide breaks down the major expenses you should plan for, with local context and examples, so you can budget confidently and avoid surprises. By knowing what to expect, you can choose a car that fits your budget and enjoy car ownership without financial stress.

Monthly Loan Instalments (If Financed)

For many buyers, the car loan payment is the first cost to consider. If you financed your vehicle, you'll have a fixed monthly instalment that includes repayment of the principal and interest. The amount varies widely depending on the car's price, your deposit, the loan term, and interest rate. As of 2025, car finance interest rates in South Africa are relatively high (tracking the prime rate), and loan terms often stretch to 72 months (6 years). For example, a small new hatchback (around R250,000) might cost roughly R4,500–R6,000 per month in instalments, whereas a mid-size SUV could be R9,000–R12,000 per month.

Keep in mind that taking a longer term or a balloon payment will lower the monthly payment but means you pay more interest overall (and face a lump sum at the end, in the case of a balloon). It's wise not to max out what you can afford on the instalment alone, because as we'll see, owning a car comes with many other monthly costs. In fact, industry experts suggest budgeting at least 50% more than your car payment for the total monthly ownership cost once you add everything up.

Fuel Costs

Fuel is often the biggest ongoing expense for car owners in South Africa, especially with our fluctuating petrol and diesel prices. How much you spend on fuel per month depends on your vehicle's fuel consumption and how far you drive. Let's break it down: Suppose you drive about 1,000 km a month and your car averages 8 litres per 100 km (which is 12.5 km/L, typical for a small car). That means you use about 80 liters of fuel a month. With petrol around ~R23 per liter as of early 2024, that's roughly R1,840 per month on petrol.

As of mid-2025, a typical 45-litre tank of petrol costs about R1,100 to fill; if you need two fill-ups a month, that's ~R2,200/month. Drivers with long daily commutes or heavy vehicles (like large SUVs or older cars) could easily spend R3,000–R4,000+ per month on fuel. Also remember that fuel prices are a moving target – prices change monthly based on international oil markets and the Rand/Dollar rate. It's prudent to leave some cushion in your budget for potential fuel price hikes.

Insurance Premiums

Car insurance may not be legally required in South Africa for private vehicles, but it is essential for protecting yourself financially. If you financed your car, the bank will require comprehensive insurance. Even if you own the car outright, going without at least third-party insurance is extremely risky – one accident could leave you or someone else with a huge bill.

When budgeting, plan for a monthly insurance premium. The cost depends on factors like your vehicle's value, your age and driving history, where you live, and the coverage level (third-party vs. comprehensive). For a modest car, comprehensive cover might range roughly from R1,200 up to R2,500 per month in 2025. Newer or higher-value cars (and younger drivers) tend to be on the higher end. Some insurers offer lower premiums if you opt for a higher excess, install a tracking device, or drive fewer kilometers. On average, a typical compact hatchback might be around R800 – R1,000 per month for insurance for an experienced driver. Always get a few quotes to see where you can get the best deal. While it's tempting to skip insurance to save money, don't – one fender-bender or theft incident could be financially devastating without it.

Maintenance and Service

All cars need maintenance, whether it's routine servicing or the occasional repair. Budgeting for maintenance is crucial so that you're not caught off guard by repair bills. New cars often come with a service or maintenance plan for the first few years or a certain mileage, which helps initially. But beyond that (or if you bought used without a plan), you'll be paying out of pocket.

At minimum, plan for an annual service – the small services (oil change, basic inspections) can cost around R3,000 to R5,000 for a typical car. Every few years, a bigger service (with more items like spark plugs, filters, maybe a cambelt) will cost more, potentially R7,000–R10,000+ depending on the car and what needs doing. To smooth this out, some experts suggest setting aside perhaps R500 or more per month for maintenance if the car is out of plan. This way, when a service or repair comes up, you've accumulated the funds.

Don't forget wear-and-tear items: brake pads, battery, wiper blades, shocks – these will need replacing on occasion. For example, brake pads might be a few thousand rand and typically last 30,000–50,000 km depending on use. A new battery might be ~R1,500 and could last 3-4 years. Keep in mind that as the car ages, maintenance costs tend to increase – an older car might need more frequent part replacements, so budget a bit extra if your car is, say, over 5-7 years old.

Tyres

Tyres warrant a special mention in your budget. They are a significant cost, but not one you pay every month – more like every few years. However, you should save towards tyres gradually. The cost of tyres in South Africa can vary: small hatchback tyres might be ~R800 – R1,200 each, while SUV or performance car tyres can be R2,000 or more each. Since you have to replace all four (usually two at a time, but eventually all), a full set could range from R3,000 up to R10,000 depending on your car and tyre brand.

How long tyres last depends on your driving: typically ~40,000 to 60,000 km for a quality tyre if you rotate them and keep them inflated properly. If you drive 1,000 km a month, that could be about 3-5 years before replacement; at 2,000 km a month, maybe 2 years. It's wise to start putting a bit aside for tyres so that when the time comes, you have, say, R5k–R8k ready for a new set. In summary, think of tyre replacement as a periodic expense and proactively budget for it (for example, saving ~R200–R300 a month toward tyres).

Licensing and Other Fees

Every year, you must renew your car's vehicle license (the disc on the windshield). The cost is relatively small compared to other expenses but should be included in your budget. The annual license renewal fee in South Africa depends on your vehicle's type and weight. For most passenger cars, it's on the order of a few hundred rand. For instance, a small car might be around R600 per year for the licence disc. Larger or heavier vehicles can be closer to R1,000 or a bit more. While that's only about R50–R100 per month if you break it down, don't forget to actually pay it annually – missing your renewal can result in fines.

Speaking of fines, while they're avoidable with good driving, life happens – you might get a speeding or parking ticket, so it's not a bad idea to have a small buffer in your transport budget for the odd traffic fine or two. Additionally, consider toll fees if you regularly use toll roads. Another possible fee: if you live in a city where you pay for parking at work or monthly parking in a building, include that as well (e.g., R500/month for a parking bay, if applicable).

Example: Putting It All Together

Let's illustrate with an example of a typical scenario: Say you finance a popular used hatchback for around R200,000. Your instalment might be ~R4,000/month (assuming a moderate interest rate over 60 months). Add fuel: maybe R1,500/month (if you drive average distance). Insurance for a middle-aged driver on that car might be ~R800/month. Maintenance without a plan – you set aside R500/month. Tyre fund – R200/month saved. License – ~R50/month (R600/year). Maybe you have occasional toll or parking – say R200/month. Add those up:

In this scenario, though the car payment was only R4k, the true cost of owning and running the car is about 80% higher than the instalment alone. This aligns with general advice that a car's monthly instalment is just the beginning.

Your numbers will vary, but the takeaway is to budget holistically. Before buying, do the math for your case: If the sum of all these costs fits comfortably in your income (with room for increases), then you're good to go. If not, you might need to consider a cheaper car or ways to cut usage costs. Owning a car brings freedom and convenience, but only when you plan for all the costs can you enjoy that freedom with peace of mind.