If you purchase a vehicle worth R1 million, this is your estimated monthly instalment

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2021 Mercedes-AMG A45 S: R1 156 840
2021 Mercedes-AMG A45 S: R1 156 840
Charlen Raymond

• We calculate the estimated monthly instalment on vehicles retailing for R1.0 million.

• The estimated results should be used as guides.

• Prospective buyers are encouraged to discuss all purchasing costs with their finance provider

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Following the horrific bloodbath that was 2020, new vehicle sales in South Africa have been on a steady recovery path. When the Covid-19 pandemic struck, the automotive sector was one of the most hard-hit sectors of the South African economy. But thanks to relaxed Lockdown regulations and uptake of economic activities, buyers flocked to dealerships to get in on the many specials that were ongoing at the time.

While some South Africans really felt the pinch last year, others were a bit luckier not to have felt the financial impact that Covid-19 brought about - at least, not as much. This meant that buyers could still purchase the vehicle of their choosing and manage the accompanying monthly instalment. So, if someone were in the fortunate position to acquire a new car, just how much are they spending on instalments?

That's what we're about to find out.

Suzuki Brezza
2021 Suzuki Brezza 1.5 GLX: R289 900

Quick calculation

George Mienie, AutoTrader CEO, says that consumers should always do their research before signing on the dotted line. He stresses: "This advice extends to finance, too. Shop around for the best possible financing agreement and enlist the help of your dealer, who can usually get a better deal for you than your private banker. Always ask to see the various deals - so you can see exactly what's on the table. Don't forget to push for a better interest rate and ensure that you understand all the administrative fees. Remember: the monthly instalment is not the only cost of owning a car!"

Whether it be new or used, vehicle prices always carry hidden costs, which the prospective buyer should always inquire about. If a car's listed price is, for example, R250 000, you can be sure that there will be a few thousand extra Rands you'd have to pay. That amount should be made clear to you by the salesperson and your finance provider.

But going on the premise of a 10% deposit, no trade-in vehicle, no residual, a 10% interest rate*, and a 60-month (five years) payback period, your estimated monthly instalment on vehicles with the following prices are:

R1 000 000: Monthly repayment of R19 122, with a total payment of R1 147 340 and an expected total interest of R247 340.

R500 000: Monthly repayment of R9561, with a total payment of R573 670 and an expected total interest of R123 670.

R200 000: Monthly repayment of R3824, with a total payment of R229 468 and an expected total interest of R49 568.

bmw,5 series
2021 BMW 520d M Sport: R1 043 996
ford ranger
2021 Ford Ranger 2.2 double cab 4x4 XL: R500 800
Kia Picanto
2021 Kia Picanto 1.0 Street: R201 995

Consider all costs

These costs are only indicators of what prospective buyers can expect to pay every month. To calculate the monthly instalments yourself, click here to make use of the AutoTrader Car Finance Calculator. Keep in mind that the monthly instalment excludes the cost of fuel, insurance, and other factors like wear and tear.

Mienie further suggests that consumers pay off the car at the same rate at which the car depreciates to avoid long-term debt and ensure that the car's value is not more than it's worth. 

He concludes: "It is important to bear in mind that cars depreciate the moment you drive them off the showroom floor. Your car's value will also decrease as it gets older, but the finance term doesn't change. Be mindful of the fact that cars can be over-leveraged through balloon or residual payments. Also, get periodic valuations on your vehicle for both trade and retail and compare these values to the amount you owe on your finance."

*The interest rate is influenced by various factors and will be made clear to the buyer by the finance provider upon application.

Disclaimer on AutoTrader website regarding its Car Finance tool
Disclaimer: While we make every attempt to give you the best possible tools and information, AutoTrader SA, its agents, employees and accredited financiers will accept no responsibility for any loss or miscalculations that may arise. All calculations made on this calculator are to be used as guidelines only. It is based on the information you have provided and does not take into account monthly expenses and other factors that need consideration when purchasing a vehicle. Amounts displayed here should not be relied upon solely in making your purchase.

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