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There are now only seven passenger vehicles that retail for under R200,000 in South Africa, as cars have either been discontinued or seen notable price increases over the years.
Many experts, banking professionals, and lenders have noted the financial pressures South Africans face due to load shedding, heightened inflation, and consecutive interest rate hikes – among others.
This has created a cost-of-living crisis in the country, as food, petrol, and electricity have become notably more expensive – making the cost of borrowing less attainable for many South Africans.
This is the central theme as several of South Africa’s major banks noted the rise in credit impairments over the latest reporting period, showing an increase in customers defaulting on their loan repayments.
In Capitec’s latest financial results, the bank flagged these challenges, recording a massive 80% increase in credit impairments, which amounted to R6.3 billion. The bank attributed the rise in credit impairments to borrowers facing difficulties in repaying various loans, including vehicle finance.
Cars have become an essential form of transport for most of South Africa, but the list of affordable options is dwindling. Several car makers – such as Renault, Ford, and Datsun – have discontinued their entry-level models.
In contrast, others have increased the retail prices of their affordable options amid the various challenges facing the manufacturing industry.
For example, Suzuki South Africa has raised the prices of most of its cars as of 3 May, in line with the automaker’s quarterly review of input costs. The decision to raise the prices was affected by many factors, it said, including:
- Inflation;
- Stock volumes;
- Model lifecycle stage;
- Increase in raw material costs;
- Addition of new model features;
- Rand value and currency exchange rates;
- Model profitability margins and volume sales; and
- Market and model competitor price comparison.
Despite the increases, Suzuki has kept several of its affordable options under R200,000, and most of the vehicles on this list are offered by Suzuki – the most affordable model (and cheapest in South Africa) being the Suzuki S-Presso with a starting price of R169,900.
The other Suzuki models currently priced under R200,000 include the Celerio, DZire, and Swift. The list also includes Toyota’s new entry-level offering – the Vitz – which starts at R189,900.
The current prices of the cars on this list translate to monthly instalments of between R3,811 and R4,467 – assuming no deposit and a 0% balloon payment over five years (60 months) at an interest rate of 11.25%.
Industry experts still recommend that prospective buyers spend no more than a quarter (25%) of their monthly income on vehicle-related costs, making these cars quite affordable for the average formally-employed non-agricultural worker who earns R26,032 (according to Stats SA’s latest quarterly employment survey (QES)).
The seven vehicles currently priced under R200,000 in South Africa are listed below:
Suzuki S-Presso – starting at R169,900
Suzuki Celerio – starting at R178,900
Renault Kwid – starting at R184,999
Toyota Vitz – starting at R189,900
Suzuki DZire – starting at R198,900
Proton Saga – starting at R199,900
Suzuki Swift – starting at R199,900
Read: Crossover SUVs you can get in South Africa for R10,000 a month
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