South African consumers may be buying cars with alacrity, but the cost of running a car isn’t insignificant. With this in mind, Chris de Kock, executive head of sales and marketing at WesBank, has come up with some tips to help us all save on our monthly car expenses.
A good place to start is with fuel costs. Over the past few years, the rising fuel price has resulted in this becoming one of the biggest expenses for car owners – the price of petrol currently tops R10 a litre.
The average monthly fuel expense has risen from R963,20 in 2007 to R1 412,60 in 2011, an increase of 46%.
The fuel portion of the Total Mobility Calculation basket (this is based upon an entry level vehicle costing R100 000 in 2007, increasing by CPI rate compounded annually, travelling an average of 2 000km a month and running on Unleaded 93 inland) has subsequently increased from 24% in 2007 to 28% in 2011.
During the same time, the instalment of the vehicle increased from R2 201 in 2007 to R2 609, an increase of only 18%.
So how to cut down on your monthly fuel costs?
Car pooling and sharing journeys is an obvious one, as is simply trying to drive less. But you can also look at buying the most fuel-efficient car and driving more responsibly. A car has the greatest fuel efficiency at about 100 kilometres per hour. If you accelerate hard from 100kph to 130kph, there will be a large increase in fuel consumption.
To make sure your car’s running efficiently, don’t neglect regular services.
Instalment payments are often the largest portion of monthly expenses associated with owning a car.
While financing a car allows people to own a car that they would otherwise be unable to afford, it is important that these monthly instalment payments are manageable and fall within your budget. It’s also important to take into account how a rise in interest rates will affect your monthly instalments and whether you would still be able to afford the payments. If you can’t meet your monthly instalments, speak to the financing company sooner rather than later to discuss a solution.
Monthly running costs
These are the actual costs that depend directly on you using your vehicle: tolls, tyres, service and repair costs. Keeping your car in tip-top condition can help to reduce the running costs of your vehicle.
- Take your car in to be serviced at the prescribed intervals.
- Replacing dirty air filters and sparkplugs could help reduce the usage of fuel.
- Make sure your tyres have adequate tread and check tyre pressures weekly – this will help in not having to replace your tyres regularly.
While car insurance may sometimes seem like an unnecessary expense, it is vital in protecting you from potential financial catastrophe in the event of theft or a serious accident. It’s important to ensure you’re getting good value for money from your insurance cover, though.
- Look for an insurance policy that best meets your specific needs. Don’t pay for cover that you do not require.
- Conduct annual reviews to ensure your current premium is competitive.
- Speak to your insurance company or broker about what you can do to reduce your premiums. Many insurers offer discounts for safety precautions taken by owners, such as tracking systems, secure lock-up facilities and even driver behaviour.
- Read the terms and conditions of your policy carefully and beware of exclusion clauses.