Motoring cost still increasing
THE interest rate cut and drop in petrol price during July was good news for consumers, however, the cost of motoring continues to rise steadily. The monthly mobility basket, which comprises of vehicle instalments, fuel, insurance and maintenance fees, has risen to R7 851.39. This is 3% higher than last year, and 28% higher than five years ago when monthly costs amounted to R6 144.22.
These costs are reflected by the Wesbank Mobility Calculator, a tool that tracks and calculate msotoring expenses. The total mobility basket comprises all the fees that are involved with vehicle ownership: a monthly instalment, the insurance premium, fuel and maintenance fees. These expenses are regularly updated to reflect inflation, interest rates and other fluctuating costs, and are based on an average entry-level vehicle that travels approximately 2 500 kilometres per month.
Vehicle instalments and fuel spend remain the largest portions of the monthly mobility basket, accounting for 80% of monthly mobility spend. However, when viewed as a portion of the monthly motoring budget, fuel spend is significantly less in 2019 compared to five years ago. Fuel spend accounts for 35% of the total this year, while vehicle instalments are 45%. This contrasts with the mobility basket in 2014, where fuel spend and vehicle instalments cost about the same amount.
Vehicle instalments and insurance premiums account for the highest increases over the past five years, mainly as a result of vehicle price inflation. From 2014 to 2019, vehicle instalments increased 43%, while insurance premiums grew 40%. In comparison, fuel spend and maintenance fees only grew 11% and 8% respectively over the same period.
Wesbank’s data indicates favourable vehicle price inflation over the past year, with consumers only spending marginally more on new and used vehicles. In June, the average new vehicle financed through Wesbank cost R321 715, while the average used vehicle cost R215 848. This reflects only a 3% and 2% year-on-year change for new and used vehicles respectively. | IOL Motoring