Guiding consumers since 2009

Vehicle maintenance costs at all-time high

By Staff Writer
Nicolette Dirk, finance writer,
Vehicle owners feeling the pinch of the rising cost of fuel and interest rate hikes should focus on managing maintenance costs that eat away on monthly income. 
Glenn Stead, head of products for vehicle and asset finance at Standard Bank, said consumers should look at the overall maintenance costs when considering buying a new vehicle – not just the monthly instalment repayments. 
“Consumers need to be realistic about what they can afford. As vehicles depreciate in value, their running costs appreciate.  As a guideline, costs of maintaining and running a vehicle should not exceed 30% of gross monthly income,” he said. 
Fuel costs, which often vary depending on the length of the consumer’s daily commute, are one of the obvious costs. But there are the additional, less obvious costs that slowly add up, such as monthly insurance premiums, regular wear and tear on the vehicle and e-toll fees.
“Added together, these running costs could end up being double the monthly instalment value, or even equal the value of monthly repayments for a new vehicle in a higher price range,” said Stead. 
Here are some tips to manage your vehicle maintenance costs: 
Fixed rate vehicle financing option – although it is marginally higher than the variable rate, by utilising this option vehicle owners can be assured that they will not be affected by further interest rate hikes. It may be better for the first time buyer to use this option. 
Reward programmes – reward programmes offer an opportunity for vehicle owners to save on their monthly running costs. By filling up at select filling stations, account holders can get back as much as R1 for every litre. For example, Standard Bank’s UCount Rewards programme has paid back R77 million in redemption points to customers through its fuel reimbursement option.
Reduce bills without compromising insurance - Vehicle owners should not be tempted to compromise on their insurance options by either switching to an option with lower premiums, or cancelling their vehicle insurance completely. 
“Many vehicle owners do not read the ‘fine print’ in their policies, which may contain exclusions such as high excess amounts. This can disadvantage them in the case of damage or loss of the vehicle,” said Stead.
Prospective vehicle owners should carefully examine the terms of their insurance contracts, to be clear on what is covered, and what isn’t.
Understand the different types of vehicle financing products: Stead said it is important for vehicle buyers to understand the different types of vehicle financing options, and the financial implications of each.

This will include the implications of residual payments at the end of the contract’s term. Banks offer a range of options and solutions to assist customers facing financial pressure. This includes structuring a grace period for repayments.
If you want to apply for vehicle finance click here.

Recent Articles

Featured Everything you should know about tax auto assessment

In 2019, the South African Revenue Service (SARS) launched a system, which was dubbed an “auto assessment”, to assist taxpayers with their annual tax returns. But what does this system entail, and how will it impact you?

What does it mean to be a registered Financial Services Provider?

You may have noticed that financial institutions state that they’re registered Financial Services Providers (FSP). But what does this actually mean, and how does this benefit you as a consumer?

Should the retirement age change?

Across the world, people are retiring later than they used to. However, retirement products are centred around set retirement ages at which point you’d be able to access your retirement savings. But how applicable is the current retirement age in South Africa?

Everything you need to know about wills

Death can leave a lot of confusion and chaos. What happens to your possessions when you die can have a profound effect on those you leave behind. But you can soften the impact by drawing up a will.


Get 30% off your gym membership with Absa student account

Price: Available on request
When: Daily
Where: Nationwide

Get 10% discount on

Price: Available on request
When: Daily
Where: Worldwide

Get up to R5 back in rewards points when buying fuel

Price: Available on request
When: Daily
Where: Nationwide

Latest Guide

Guide to debt rehabilitation solutions