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Many motorists have started to voice concerns regarding new vehicle prices in South Africa as they have seen notable increases in recent years, and this concern seems to be supported by a recent study – which shows South Africa has some of the highest car prices in the world.
This study was conducted by Compare the Market Australia (CMA), which compared the prices of nine popular models across seven countries to give an idea of how vehicle prices compared worldwide.
CMA noted that it gathered car prices from the official car brand websites in each country for the latest official models – converting their local currency prices into USD for comparison.
It added that these conversions were done near the end of March 2023, and car pirces refected are accurate as of 27 March 2023.
CMA also noted that prices do not include additional on-road costs associated with purchasing a new vehicle and final purchasing costs may differ depending on several financial factors respective of the given juristiction.
It added that the Toyota Hilux and Honda Civic were not available in all countries we explored, so the closest equivalent models – the Toyota Tacoma for Canada and the USA and the Honda City in Colombia – were used instead.
According to the data, Canada has the lowest prices overall. Six out of the nine models compared were the cheapest in Canada, including the Toyota Corolla, Mazda 3, Mazda CX-5, Mitsubishi Outlander, Subaru Forester and Jeep Grand Cherokee.
In contrast, Peru had some of the highest prices overall, followed closely by South Africa having the second most expensive car prices, and then Colombia.
The report showed Peru was the most expensive for the Jeep Grand Cherokee, the Mazda 3 and Mazda CX-5, while South Africa was the most expensive for the Mitsubishi Outlander, the Toyota Corolla and the Honda Civic.
“Peru was the most expensive overall as Colombia and South Africa had a couple of models where prices were cheaper than most other countries on the list, leaving Peru with the highest average of all countries compared,” said CMA.
The table below shows the prices for car models in each country, using US dollars.
South Africa fares the worst in car-affordability
When considering after-tax income in each country, the report revealed that South Africa has the worst car price to disposable income ratio.
This was shown when CMA compared the price of the cars in each country to their respective average disposable income.
The ratio was shown by calculating how many years of disposable income are needed in each country to buy each specific car.
CMA noted that the average disposable income data was sourced from the OECD Better Life Index, in USD. It also noted that the OECD index for disposable income did not have data for Peru, so Peru was removed from this comparison.
The car prices in each country were divided by the annual average disposable income in each country to create a car price to disposable income ratio – showing the number of years it would take to purchase a given car outright.
According to the data, it would take the average South African 7.8 years of disposable income to buy a Jeep Grand Cherokee, over four years to afford a Honda Civic, and just under three years for a Toyota Hilux.
Following South Africa is Columbia in second and the nAustralia in third. on the other end of the spectrum, the USA has the best ratio, followed by Canada and New Zealand.
The table below shows how many years of disposable income are needed in each country to buy each specific car.
Read: How much more you’re paying for your car every month in South Africa: 2021 vs 2023
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