Heavy fuel costs driving budgets to record high

Motor News Reporter

MOTORISTS face a monthly fuel cost that nearly equals the amount consumers pay for their cars, according to WesBank's updated Monthly Mobility Calculator.

With the current record high fuel prices‚ consumers are having to spend 36.5% of their monthly mobility budget on fuel and just 38.6% on the actual installment on their vehicle.

The bank's monthly mobility calculator takes into consideration the average cost of ownership to operate a vehicle on South African roads‚ including the monthly finance installment‚ the cost of fuel to operate the vehicle‚ insurance‚ maintenance and‚ for Gauteng motorists‚ the cost of e-tolls. The calculator has tracked the mobility basket since 2007.

"It's vital for consumers to consider the overall budget of operating their vehicle of choice when considering what to buy‚" Wesbank CEO Chris de Kock said. "Affordability is not driven simply by the price of the car‚ but more by the total cost of ownership."

Since 2007‚ the contribution of the actual finance installment on the vehicle has trended downwards significantly‚ while the cost of fuel has taken more and more share of the total basket. In 2007‚ the installment accounted for 53.3% of the mobility budget and the cost of fuel just 27.8%. Insurance and maintenance portions of the budget have remained relatively stable over the past six years.

"Affordability remains the single biggest consideration affecting vehicle sales‚ whether new or pre-owned‚" says De Kock said. In 2007‚ the average contract period over which finance transactions were concluded was 56 months. This has since increased to 68 months. – BDlive