Research by analytics group Lightstone shows the value of the car you can afford on your monthly salary in South Africa.
Previous data from the group showed what house price one could afford – and in which types of neighbourhoods – based on a gross salary in the country.
The assessment assumes that 30% of a person’s gross salary would go towards paying a mortgage over 20 years.
Now the group looks at cars – the value of the car you can afford based on your monthly salary, assuming 20% of the gross goes towards the vehicle, financed over 5 years.
According to Lightstone’s findings, a salary of R49,900 could get you a R1.5 million property in Noordheuwel, and you could add a vehicle worth R442,000 – like a brand new Kia Sportage 2.0 AWD MY14 AT, or a second hand Mitsubishi Pajero BK 3.2 DI-DC.
A salary of R41,600 could afford a R1. 25 million property in Parkhill in KwaZulu Natal, and a brand new MINI Cooper convertible 1.6 MY16 worth R368,000.
The table below shows how much you could spend on a car based on your monthly salary – as well as examples of both new and second-hand cars in the given price range.
The pricing is based on:
- Assumed allocation of 20% of a person’s salary (as a broad average, taking into account the fact that 30% of a person’s salary went toward mortgage repayments)
- An interest rate of Prime + 2% (12.5%) on Vehicle Asset Finance
- Car repayments made over a five year period
- Stock price of a vehicle with no extras
- 100% financing with no deposit made in purchasing the car, but initiation fees and other related costs are excluded.
|Gross monthly salary||Car value*||Types of cars in range||Types of second-hand cars in range|
|R327 800||R2 914 000||Maserati Grandcabrio MC Automatic Cabriolet||Lamborghini Gallardo LP550-2 (2014)|
|R213 000||R1 893 500||Jaguar F-Type 5.0 V8 R Coupe AWD (2016)||Porche 911/997 3.8 Speedster Cabriolet PDK|
|R106 500||R946 750||Land Rover Range Rover Evoque 2.0 SI4 Autobiography (2016)||BMW 750i (2012)|
|R89 900||R799 185||BMW 440i Gran Coupe 8-SP Sports Model (2016)||Mercedes ML 500 Blue Efficiency 4×4 Automatic|
|R66 600||R592 050||Subaru Outback 3.6 RS AWD CVT (2016)||Toyota Landcruiser Prado 3.0 DT VX (2013)|
|R58 200||R517 380||Audi A4 2.0T FSI Sport S-Tronic (2016)||Jaguar XF 3.0D S Premium Luxury (2012)|
|R49 900||R443 600||Kia Sportage 2.0 AWD (2014)||Mitsubishi Pajero BK 3.2 DI-DC GLS (2012)|
|R41 600||R369 800||Mini Cooper Convertible 1.6 (2016)||Toyota Fortuner 3.0 D-4D 4×4 DSL Limited Edition|
|R33 300||R296 000||Mazda 3 2.0 Individual 5-DR (2014)||Audi TT Coupe 1.8T FSI|
|R23 300||R207 130||Hyundai i20 1.2 Motion 5-DR (2015)||Ford Ecosport 1.0 Ecoboost Titanium|
|R16 600||R147 570||Toyota Etios SD 1.5 XI (2015)||Honda Ballade 1.5 Elegance Automatic|
|R10 000||R88 900||Geely LC 1.0 GS 5-DR||Kia Picanto 1.0 5-DR (2011)|
|R6 300||R53 340||–||Chery QQ3 0.8 TE 5-DR|
*Financed over 5 years at 20%
“We weighted 30% of a person’s gross monthly salary on mortgage repayments and 20% on car finance, but this ratio could quite easily be adjusted for individual needs and investment preferences,” the group said.
“A person at the coast may opt to spend less on their car as the perception of humidity and salty sea causing substantial damage to it in the long run increases; whereas a person living in Pretoria and travelling to JHB each day might opt to spend more on a more comfortable car to provide more comfort during the long daily commute.”
“At the end of the day individual home and vehicle buyers will have to make informed decisions based on their personal affordability assessments on how much they are willing to spend on each.”
R2.9 million car – Maserati Grandcabrio MC Automatic Cabriolet
Needed gross salary: R327,800 per month
R946,750 car – Land Rover Range Rover Evoque 2.0
Needed gross salary: R106,500 per month
R592,050 car – Subaru Outback 3.6 RS
Needed gross salary: R66,600 per month
R369 800 car – Mini Cooper Convertible 1.6
Needed gross salary: R41,600 per month
R207,130 car – Hyundai i20 1.2 Motion
Needed gross salary: R23 300 per month
R88,900 car – Geely LC 1.0 GS
Needed gross salary: R10,000 per month
Source: Business Tech