2025 Guide: Costs to Expect When Owning a Car in South Africa

Owning a car in South Africa in 2025 is more expensive than ever. Here’s what you need to know about the costs:

• Monthly Costs: Expect to spend about $654.46 (R11,760.29) per month for a mid-range hatchback, including insurance, fuel, maintenance, and more.
• Initial Purchase: New cars range from $11,373.22 (R204,358) for a VW Polo Vivo to $27,863.67 (R501,546) for a Ford Ranger. Used car prices average around $22,980 (R420,771).
• Recurring Expenses:
  • Insurance: $101.68 (R1,827.24) monthly.
  • Fuel: $217.36 (R3,902.50) monthly.
  • Maintenance: $26.48 (R475.60) monthly.
  • License Renewals: $33.39 (R600.00) annually.
• Financing: Interest rates for car loans range from 9% to 20%, with monthly payments varying based on the loan amount and term.
• Depreciation: Cars lose 15–20% of their value in the first year and 30–40% after five years.
• Fuel Prices: Petrol costs $1.14 (R21.40) per liter inland and $1.10 (R20.61) at the coast.

Key Savings Tips:

• Budget 1–2% of your car’s value monthly for maintenance.
• Opt for fuel-efficient models like the Suzuki Celerio (4.2 L/100km).
• Compare financing and insurance options to find the best rates.

Understanding these costs and planning ahead can help you manage the financial burden of car ownership effectively.

The REAL COST 💸 of CAR OWNERSHIP in 2025 !!

1. Initial Purchase Costs

Buying a car involves more than just the sticker price. It’s essential to account for all upfront expenses to avoid any surprises.

1.1 New vs. Used Car Prices

Used car prices have seen modest increases but are stabilizing after the pandemic. In March 2025, the average price of a used car was R417,688, rising slightly to R420,771 by April 2025. According to George Mienie, CEO of AutoTrader:

"The April 2025 used car market data shows steady demand, with some fluctuations compared to last year April and March 2025. While the Ford Ranger continues its dominance, the overall sales performance shows a growing preference for practical, cost-effective vehicles like the Toyota Starlet and Polo Vivo."

This trend reflects local buyers’ focus on affordability and fuel efficiency. Popular models include:

• VW Polo Vivo: R204,358 (≈ $11,373.22)
• Suzuki Swift: R203,411 (≈ $11,320.61)
• Toyota Starlet: R235,261 (≈ $13,081.72)
• VW Polo: R268,033 (≈ $14,912.40)

For premium options, the Mercedes-Benz C-Class averages R376,262 (≈ $20,926.78). Utility vehicles are also in high demand, with the Ford Ranger leading at R501,546 (≈ $27,863.67), followed by the Toyota Hilux at R464,498 (≈ $25,832.10) and the Toyota Fortuner at R482,598 (≈ $26,811.00).

Sales data shows 28,675 used vehicles sold in April 2025, generating R12.06 billion (≈ $670.89 million). This is slightly lower than March 2025, which saw 29,896 sales totaling R12.48 billion (≈ $694.44 million). Mienie adds:

"Despite the slight dip in sales, the market remains resilient, with consumers prioritizing long-term value and fuel efficiency."

This gives a clear picture of car pricing trends, setting the stage for financing options.

1.2 Car Loans and Financing

Financing plays a major role in car purchases, and interest rates significantly influence affordability. Recent rate cuts by the South African Reserve Bank have made borrowing more accessible, with the prime interest rate at 11% as of January 2025. This follows three rate reductions totaling 75 basis points since September 2024.

Mikel Mabasa, CEO of Naamsa, explains:

"Vehicle purchases remain highly sensitive to interest rate movements given the predominant use of vehicle financing in the SA market. Lower borrowing costs will enhance vehicle affordability across all market segments, encouraging consumer purchases and facilitating fleet expansions for businesses."

The impact of lower rates is clear. For a R100,000 car, monthly payments drop from R2,308 (≈ $128.33) to R2,270 (≈ $126.22), saving R38 (≈ $2.11). For a R500,000 car (≈ $27,827.50), the savings jump to R189 (≈ $10.50) per month.

Interest rates for car loans typically range from 9% to 20% APR. New car loans often come with better terms, usually between 7% and 9% (sometimes up to 13%), while used car loans are generally between 10% and 12% (with rates occasionally reaching 16%).

Here’s a quick look at financing options:

Additional loan costs include a one-time initiation fee of R1,207.50 (≈ $67.08) and a monthly administration fee of R69 (≈ $3.84). The National Credit Act ensures transparency by capping interest rates and requiring affordability assessments.

To improve your loan terms, focus on maintaining a good credit score, saving for a larger deposit, and comparing multiple offers.

1.3 Registration and Tax Fees

Registration and licensing fees are another important expense to budget for. The Department of Transport has streamlined online services, which has helped reduce these fees in recent years.

• Vehicle registration certificate: R330 (≈ $18.36), down from R530 (≈ $29.48) in 2022 and R700 (≈ $38.92) in 2021.
• Change of ownership notification: Also R330 (≈ $18.36).

Other registration costs, like administrative processing and ownership transfer, typically range from R500 to R1,000 (≈ $27.83 to $55.65).

Dealerships often charge "on-the-road" fees for pre-delivery inspections, roadworthy certificates, initial fuel, administration, and cleaning. These can add up to R4,000 (≈ $222.60) but are usually negotiable.

Value-added tax (VAT) at 15% is already included in the price of new vehicles, so there’s no additional tax on the vehicle itself. However, financing charges and some service fees may attract VAT separately.

The Department of Transport is also working to improve driving license processing times, aiming for a 10-day turnaround by 2025. The online booking fee for licenses remains affordable at R22 (≈ $1.22).

To cover all registration, licensing, and related fees, plan to set aside an extra R5,000–R10,000 (≈ $278.30–$556.50) beyond the vehicle’s price. This ensures you’re fully prepared for the complete purchase process without unexpected costs.

2. Monthly and Annual Running Costs

Beyond the initial purchase price, owning a car comes with ongoing expenses that can add up quickly. To avoid unexpected financial strain, it’s essential to factor in these recurring costs when budgeting for car ownership.

2.1 Fuel Costs in 2025

Fuel remains one of the largest ongoing expenses for car owners, heavily influenced by market trends and government taxes. As of May 2025, the price of 95 unleaded petrol is R21.40 per liter inland and R20.61 per liter at coastal areas. Meanwhile, 93 unleaded petrol is priced at R21.29 per liter inland, and diesel averages R18.93 per liter.

These prices include R6.37 per liter in government taxes, with R4.01 allocated to the General Fuel Levy and additional fees. A dip in Brent crude oil prices from $71.04 to $66.40 in April and May 2025, driven by U.S. trade policies, resulted in a 22-cent per liter drop in 95 petrol prices that same month.

Your fuel costs will vary depending on your car’s efficiency and driving habits. For example, highly efficient models like the Suzuki Celerio and Toyota Vitz automatic boast fuel consumption rates of 4.2 L/100km, while the Mercedes-Benz CLA 220d diesel achieves 4.4 L/100km.

Here’s a breakdown of annual fuel costs based on different vehicle types and driving distances:

Keep in mind that city driving, with its stop-and-go traffic and shorter trips, can increase fuel consumption by 20–30% compared to highway driving.

2.2 Insurance Premiums

Insurance is another critical cost to consider, and premiums can vary significantly based on factors like your driving history, location, and vehicle type. As one expert puts it:

"Insurance premiums aren’t one-size-fits-all".

For basic third-party insurance, expect to pay between R200 and R500+ per month (≈ $11.13 to $27.83). Comprehensive insurance, which covers both your vehicle and third-party damages, ranges from R800 to R2,000+ monthly (≈ $44.52 to $111.31).

Here’s a comparison of popular insurers and their offerings:

Factors like your car’s value, annual mileage, and the level of coverage you choose will influence your premium. Online-only insurers often offer discounts of 15–30% compared to traditional providers. You can also lower your premiums by bundling policies, increasing your excess, or taking advantage of safe-driving programs. For instance, Discovery Insure offers up to 50% off premiums for safe driving through their Vitality Drive program, while MiWay’s pay-as-you-drive option can save up to 25% if you drive less than 10,000 km annually.

2.3 Maintenance and Repairs

Routine maintenance is essential for keeping your car in good condition and avoiding costly emergency repairs. Service costs can vary widely depending on the type of vehicle, with basic services ranging from R1,010 to R3,900 per service.

Here’s what to expect for different car categories:

Beyond routine services, additional maintenance items like wiper blades, light bulbs, and shocks will need replacement as the car ages. Tashic Nataal recommends:

"Regular service is essential, but additional items like wiper blades, light bulbs, and shocks require replacement as the car ages. Another great rule of thumb is that you’ll need to replace your [car] shocks, usually between 80,000km and 100,000km".

To prepare for these costs, Naked Insurance advises setting aside about 2% of your car’s sticker price annually. For a vehicle priced at R300,000 (≈ $16,697), this translates to R6,000 per year (≈ $333.93) or R500 monthly (≈ $27.83).

Service plans can also help manage expenses. For example, Ford Protect Service Plans for the Ecosport or Puma range from R7,717.65 for a 3-year plan to R36,628.65 for an 8-year plan (≈ $429.31 to $2,037.71).

3. Required Government Fees

Owning a car in South Africa comes with certain government-mandated fees that are essential for keeping your vehicle road-legal. These fees are separate from the cost of the car itself and its maintenance, but they are crucial for ensuring compliance with road safety regulations.

3.1 Annual License Renewal

Every car owner in South Africa is required to renew their vehicle license annually. Fortunately, the process has become more convenient in recent years, with digital renewal options now available through online portals, messaging services, and banking apps as of 2025. The government’s NATIS system is a trusted platform for online renewals, while major banks and supermarkets have integrated this service into their apps and online platforms, making it easier to handle alongside other daily tasks.

The cost of renewing your license varies depending on the service provider. Here’s a breakdown of the fees:

Among these, FNB offers the lowest total cost at R69, while Pick n Pay charges the highest at R330 (≈ $18.36). Regardless of the provider, a standard transaction fee of R72.00 (≈ $4.01) is added to the license fee.

License renewals must be completed within a 21-day grace period after the expiration date. Failure to renew on time can result in penalties, and any outstanding traffic fines must also be cleared before renewal.

To renew your license, you’ll need the following:

• Your ID or passport
• Your current license disc
• Proof of residence (not older than three months)
• A valid roadworthy certificate (if required)

You can complete the process online, but make sure your address is up to date in the NATIS system to avoid any issues with delivery.

The Department of Transport has set a goal to process licenses more efficiently:

"Producing a driving licence card within five days is an achievable goal that requires us to work diligently in the service of our people".

By 2025, the department aims to process licenses within 10 days.

In addition to license renewal fees, car owners must account for another unavoidable cost: the Road Accident Fund levy.

3.2 Road Accident Fund (RAF) Levy

Another government-mandated cost tied to car ownership is the Road Accident Fund (RAF) levy, which is included in the price of every liter of fuel. This levy is a compulsory contribution that funds compensation for victims of road accidents and provides social security benefits for road users in South Africa.

The RAF levy currently makes up about 13% of the cost of each liter of fuel. It is reviewed annually by the National Treasury, which determines the amount based on the fund’s financial needs. The South African Revenue Service (SARS) is responsible for collecting and managing these funds.

For 2025, there’s some relief for motorists. Thabani Ndwandwe, Chief Risk Officer at Standard Bank, explained:

"The general fuel levy and Road Accident Fund levy will remain unchanged for another year, continuing the freeze introduced in 2022. This move provides around R4 billion in tax relief, preventing an even bigger fuel price hike".

This freeze keeps the government’s share of fuel costs stable, even as crude oil prices fluctuate. Additionally, planned deductions of R5.1 billion from the RAF account for about 10% of its annual income, underscoring the levy’s importance in maintaining the fund’s operations.

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4. Car Value Loss Over Time

When budgeting for car ownership, one often-overlooked expense is depreciation – the gradual loss of your car’s value over time. Knowing how this works can help you make smarter choices when buying or selling a vehicle.

Depreciation is steepest in the early years. A new car can lose around 10% of its value as soon as you drive it off the lot and up to 20% within the first year. By the fifth year, most cars drop 30–40% in value. After hitting the 100,000-mile mark, the depreciation rate tends to slow.

Several factors influence how much your car depreciates. These include mileage, accident history, age, condition, modifications, brand reputation, fuel efficiency, and market demand. On average, cars in South Africa rack up about 12,500 to 15,500 miles annually.

4.1 Value Loss for Popular Models

Not all cars depreciate at the same rate, making your choice of vehicle a key factor in managing long-term costs.

Toyota stands out for retaining value. After five years, Toyota vehicles hold onto about 63.60% of their original value, making them a financially sound option for buyers. Honda and Mazda also perform well, retaining 60.70% and 60.40% of their value, respectively.

Luxury cars, however, tend to depreciate faster. Higher maintenance costs and lower demand in the used car market often drive down their resale value. Electric vehicles also face significant depreciation because advancing technology can make older models less desirable. On the other hand, budget-friendly brands like Hyundai and Kia generally lose value more slowly, making them appealing for cost-conscious buyers.

4.2 How to Keep Your Car’s Resale Value

While depreciation is unavoidable, there are ways to reduce its impact:

• Stick to the service schedule. Regular maintenance using genuine parts and keeping detailed service records can go a long way in preserving your car’s value. Reputable mechanics ensure quality repairs and maintain your warranty.
• Drive responsibly. Avoid quick accelerations, sudden stops, and sharp turns to minimize wear and tear. Routine cleaning, waxing, and protecting your car from harsh weather can also help.
• Keep the interior clean. Use seat covers and floor mats, avoid smoking in the car, and prevent strong odors from settling in.
• Limit modifications. Excessive customizations may not appeal to buyers. If you do make changes, hold onto the original parts so you can restore the car to its factory condition before selling.
• Park smart. Use a garage or covered parking to protect your car from weather damage. Avoid parking under trees to prevent sap and bird droppings from staining the paint.

Timing is also critical. According to Lebo Gaoaketse, Head of Marketing and Communication at WesBank:

"The break-even point in your finance agreement is the point at which the trade-in value of your vehicle is equal to or greater than the outstanding balance on your loan. This is the ideal time to trade in your financed vehicle".

Selling your car privately instead of trading it in can often yield higher returns. Additionally, having comprehensive insurance and a solid motor warranty can protect your investment by covering repair costs and encouraging regular upkeep.

5. Ways to Reduce Car Ownership Costs

Owning a car doesn’t have to drain your wallet. By making smart choices and tweaking your habits, you can significantly cut down on expenses while keeping your vehicle in top shape.

5.1 Save Money on Fuel

Fuel costs can take up a big chunk of your car budget, but small changes in how you drive can lead to noticeable savings. For instance, reducing your speed by 12 mph (20 km/h) can lower fuel consumption by up to 20%. Driving more smoothly – avoiding harsh acceleration and keeping RPMs under 3,000 in manual cars – can save you up to 15% on fuel.

Simple maintenance habits also help. Properly inflated tires improve fuel efficiency by 3–5%, and keeping your car free of unnecessary weight (like heavy items in the trunk) can save fuel. Did you know that every 55 pounds (25 kg) of extra weight increases fuel use by about 1% for a mid-size car?.

Other tips include checking tire pressure monthly, ensuring proper wheel alignment, and using air conditioning wisely. For instance, at lower speeds, rolling down the windows is often more fuel-efficient than running the AC. Planning your trips with navigation apps, avoiding traffic, and combining errands can also make a difference.

"While fuel price hikes may be beyond our control, we are committed to equipping motorists with the knowledge and tools to navigate these challenges. By embracing these actionable steps, individuals can proactively take charge of their fuel consumption, lessening the impact of fuel price hikes on their wallets and contributing to a more sustainable driving future." – Lebogang Gaoaketse, WesBank Head of Marketing and Communication

Technology can help too. Fleet management software and telematics systems can provide insights that reduce fuel use by 5–15%. And don’t forget to turn off your engine if you’ll be idling for more than a minute – it adds up over time.

Pairing these fuel-saving habits with a solid financial plan can further ease the burden of car ownership.

5.2 Budget Planning and Financial Tools

Planning your car expenses is key. Factor in costs like insurance, fuel, maintenance, and unexpected repairs. A good rule of thumb is to set aside 1–2% of your car’s value each month for maintenance and repairs.

The WesBank Mobility Calculator is a handy tool to track all your motoring expenses, including how changes in interest rates could affect your monthly payments.

"It is important to understand what makes up the total monthly cost of vehicle ownership, whether the car is being driven more frequently or not. While fuel consumption might vary accordingly, the fixed monthly payments, such as vehicle finance and insurance costs, are constant expenses that need to be included in the monthly household budget. And, if you have selected a linked-interest rate in your repayment plan, interest rate fluctuations will also have an impact on the total amount." – Lebogang Gaoaketse, WesBank’s Head of Marketing and Communication

Consider the 50/30/20 budgeting method: allocate 50% of your income to essentials (like car payments), 30% to wants, and 20% to savings or debt repayment.

Insurance options like Motor Warranty, Scratch and Dent Insurance, and Tire and Rim Insurance can help manage repair costs. Learning basic car care – such as checking oil levels and tire pressure – can also prevent small issues from becoming costly repairs.

These budgeting strategies tie in well with the growing shift toward electric vehicles, which offer even more opportunities for savings.

5.3 Electric Vehicle Options

Switching to an electric vehicle (EV) can be a game-changer for reducing car ownership costs. While EVs often come with higher upfront prices, they save money in the long run through lower fuel and maintenance expenses. Plus, government incentives and an expanding charging network are making EVs more accessible.

In March 2025, a $1 billion investment was announced to boost local EV production, alongside various tax incentives and rebates aimed at reducing purchase costs.

Real-world examples highlight these benefits. Pieter Kloppers, a game farmer, shared his experience:

"With rising diesel costs, as a game farmer, I found that this electric vehicle (Bike Bakkie) has upped our effectiveness and saves us a tremendous amount of money on fuel every month."

Before making the switch, consider factors like charging station availability, your daily driving habits, and current government incentives. For those not ready to buy a new EV, companies like Etec Technologies offer conversion kits and lithium batteries to transform existing vehicles.

The charging infrastructure is also growing rapidly in cities. From 2020 to 2024, the market saw a compound annual growth rate (CAGR) of 33.5%, with projections continuing at 21.0% from 2025 to 2029. This expanding network is making EVs a practical choice for more drivers.

Conclusion: Getting Ready for Car Ownership in 2025

Owning a car in South Africa is becoming more expensive, with maintenance costs rising by 6%–8% every year. Combine that with over 80% of households already feeling the pinch from increasing living expenses, and it’s clear that careful financial planning is essential.

"Despite the recent improvement in passenger car sales, South Africa remains a price-sensitive market. Which means that, when deciding on buying a car – whether new or used – most buyers base their decision primarily on the vehicle purchase price. But it’s important to look beyond just that price and consider the total cost of ownership, which is influenced by several other factors."

• Lebo Gaoaketse, head of marketing and communication at WesBank

To manage these challenges, experts recommend setting aside 1–2% of your car’s value monthly for maintenance and repairs. Shortening your loan term and building an emergency fund for unexpected expenses can also help you stay financially secure. A well-maintained vehicle doesn’t just run better – it can save you thousands over time.

"Viewing the cost of vehicle ownership from this perspective is important, and underscores the need to objectively and honestly evaluate one’s affordability level before signing a long-term vehicle finance contract, to ensure a fulfilling vehicle ownership experience."

• Lebo Gaoaketse, head of marketing and communication at WesBank

Whether you’re eyeing a traditional car or considering an electric vehicle, the strategies shared here can help you navigate the challenges of car ownership in 2025. By planning ahead and understanding the full scope of costs, you’ll be better equipped to make smart decisions.

"A vehicle should offer freedom, not financial strain, but too often what looks affordable upfront ends up costing far more over time."

• Heide de Lange, Motor Plan Direct

FAQs

What factors affect car insurance costs in South Africa, and how can I lower my premiums?

Car insurance costs in South Africa depend on a mix of factors, starting with the make, model, and year of your car. A vehicle’s value and safety features also influence premiums – luxury or high-performance cars usually come with higher rates due to the greater risk they pose. Beyond your car, your age, driving experience, and claims history are key considerations. For example, younger or less experienced drivers often face steeper premiums. Other elements, like your annual mileage and the theft rates in your area, can also impact what you pay.

If you’re looking to cut costs, there are several strategies to consider. Driving a more modest car, installing anti-theft devices, and keeping a clean driving record can all help reduce your premiums. Reducing your annual mileage is another way to potentially save. Opting for a higher deductible can lower your monthly payments, though it means paying more out of pocket if you ever need to file a claim. Lastly, it’s a good idea to regularly review your policy to make sure it aligns with your current circumstances and needs.

How does car depreciation affect resale value in South Africa, and how can I reduce its impact?

Car depreciation is a key factor when it comes to resale value in South Africa. On average, a new car loses 15% to 25% of its value in the first year and can drop by as much as 50% within three years. Several elements, including the car’s age, mileage, brand reputation, and market demand, play a role in how quickly its value decreases. Brands like Toyota and Volkswagen tend to retain their value better compared to luxury or less common models.

If you’re looking to minimize depreciation, buying a used car is a smart move since they lose value at a slower pace. Regular maintenance, keeping mileage low, and choosing models with a reputation for strong resale value can also help maintain your car’s worth. Keeping the car’s appearance in good condition and selecting popular colors can make it more attractive to future buyers as well.

What are the cost and environmental benefits of choosing an electric vehicle over a gas-powered car?

Switching to an electric vehicle (EV) can be a smart move for both your wallet and the planet. On the financial side, EVs are less expensive to run since electricity costs about 60% less per year compared to gasoline. Plus, with fewer moving parts and no need for oil changes, maintenance costs are significantly lower, helping you save on repairs over time.

From an environmental perspective, EVs produce zero tailpipe emissions, which means less air pollution and fewer greenhouse gases compared to traditional gas-powered cars. If you charge your EV using renewable energy, the environmental benefits become even greater. Choosing an EV isn’t just about saving money – it’s also a meaningful way to support a cleaner, healthier future.

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