- Affording luxury cars in South Africa requires a substantial income, with the cheapest luxury car option, the Audi A1, necessitating a minimum monthly salary of R40,100, placing buyers within the top 8% of income earners in the country.
- The article provides a detailed table of the most affordable models from various luxury car brands, including their starting prices, minimum salaries required, and estimated monthly instalments, revealing the significant financial commitment involved in owning these vehicles.
- When considering vehicle affordability, it’s essential to account for multiple factors such as interest rates, maintenance and service costs, insurance premiums, depreciation, and fuel efficiency, to ensure a comprehensive understanding of the financial implications of owning a luxury car in South Africa.
For many South Africans, owning a luxury vehicle from elite brands such as BMW, Mercedes-Benz, Volvo, Bentley, or Ferrari remains an aspirational dream. These prestigious cars have long been associated with status and success, especially in South Africa. Apart from being status symbols, luxury cars are also celebrated for their exceptional quality, performance, and safety features. Top-tier materials, cutting-edge technology, and meticulous craftsmanship come together to make the driving experience in these automobiles truly unparalleled.
However, affording these luxurious vehicles is no small feat, as it demands the buyer to earn significantly more than the average South African salary, currently standing at R26,032. In this article, we provide an in-depth analysis of the cost of owning the most affordable models from various luxury car brands and the minimum monthly salary required to afford them comfortably.
When considering vehicle affordability, financial experts recommend allocating no more than 25% of one’s monthly income to vehicle-related expenses, including:
- Vehicle instalments
- Insurance premiums
- Fuel costs
Based on this recommendation, we have calculated the minimum monthly salary required to afford the cheapest luxury cars available in South Africa. The following table presents the starting prices, minimum salaries, and estimated monthly instalments for the most affordable models from each of the luxury brands mentioned:
| Luxury Brand | Model | Starting Price | Min. Salary (p.m.) | Est. Monthly Instalment |
|---|---|---|---|---|
| Alfa Romeo | Tonale | R739,900 | R65,100 | R16,275 |
| Audi | A1 | R463,800 | R40,100 | R10,237 |
| Bentley | Flying Spur | R4,420,000 | R386,980 | R96,745 |
| BMW | 1 Series | R641,072 | R56,500 | R14,114 |
| Ferrari | 296 | R6,804,200 | R595,500 | R148,885 |
| Jaguar | E-Pace | R1,087,000 | R95,500 | R23,865 |
| Lamborghini | Urus | R4,395,000 | R385,000 | R96,202 |
| Land Rover | Discovery Sport | R1,108,500 | R97,000 | R24,335 |
| Lexus | ES | R771,400 | R68,000 | R16,964 |
| Maserati | Grecale | R1,650,000 | R145,000 | R36,176 |
| Mercedes-Benz | A-Class | R794,509 | R70,000 | R17,469 |
| Porsche | Macan | R1,184,000 | R104,000 | R25,986 |
| Volvo | S90 | R922,600 | R81,000 | R20,270 |
Note that these calculations are based on Wesbank’s vehicle finance calculator, assuming no deposit, a 0% balloon payment over five years (60 months), and an interest rate of 11.25% – following the controversial rate hike by the South African Reserve Bank (SARB) on 30 March, which increased the prime rate from 10.75% to 11.25%.
The Audi A1 is the most affordable luxury car on this list, with a starting price of R463,800. To afford this vehicle, you need a minimum monthly salary of R40,100, which translates to just under R500,000 per annum. According to the latest World Inequality report, this places those who can afford the Audi A1 within the top 8% of income earners in South Africa. To put this into perspective, 92% of the population earns less than those who can afford the A1. The bottom 50% of working adults make approximately R12,300 per year, while the top 10% earn over 60 times more, amounting to around R780,300 per year.
On the other end of the spectrum, the most affordable Ferrari model, the 296, comes with a hefty price tag of R6,804,200. To afford this prestigious vehicle, you need a monthly salary of about R585,500, placing you firmly within the top 1% of income earners in the country.
Luxury car enthusiasts should consider the following factors while calculating their vehicle affordability:
- Interest rates: Keep in mind that interest rates can fluctuate, affecting your monthly instalments. Be sure to factor in potential rate changes and how they may impact your affordability.
- Maintenance and service costs: Luxury vehicles often have higher maintenance and service costs than regular cars. Be prepared to allocate additional funds for these expenses.
- Insurance premiums: Luxury cars typically come with higher insurance premiums due to their high value and increased risk of theft or damage. Make sure to get accurate quotes and include them in your budgeting.
- Depreciation: Luxury cars tend to depreciate faster than non-luxury vehicles. If you plan to sell your car in the future, factor in the potential loss in value due to depreciation.
- Fuel efficiency: Luxury cars often have powerful engines, which can result in higher fuel consumption. Be prepared for potentially higher fuel costs, especially if you drive frequently.
In conclusion, owning a luxury car in South Africa is a significant financial undertaking, necessitating a considerably higher income than the national average. Before investing in a luxury vehicle, ensure you have a comprehensive understanding of the associated costs and carefully evaluate your financial situation to make an informed decision.