A Smarter Way to Assess Car Affordability

There is a defining moment in the car-buying journey when emotion takes the lead: sitting in the driver’s seat, imagining future road trips, daily commutes and the freedom that comes with owning a new vehicle. While this emotional connection is an important part of the decision, it can also overshadow the financial realities that extend far beyond the initial excitement.

In South Africa, many vehicle buyers focus primarily on a single number: the monthly instalment. If it fits the budget today, the deal often feels achievable. However, this narrow view can overlook critical financial considerations that ultimately determine whether car ownership remains sustainable or becomes a source of long-term financial pressure.

“The thrill of a new car is undeniable, but it should never come at the expense of financial stability,” says Lebogang Gaoaketse, Head of Marketing and Communications at WesBank. “When consumers take the time to understand the full financial commitment, ask the right questions and properly stress-test affordability, they place themselves in a far stronger position for confident, comfortable ownership rather than ongoing financial anxiety.”

Before committing to vehicle finance, buyers should consider several key factors that are often realised too late.

What happens if your circumstances change?

Life rarely follows a predictable path. A job change, the arrival of a child, unexpected medical expenses or even a promotion that requires relocation can all impact your ability to meet monthly repayments. Affordability should be assessed against possible changes, not only current income. Could you manage your repayments if your income dropped by 20% or if your monthly expenses increased unexpectedly?

What protection is in place if you are unable to work?

Vehicle finance agreements typically run for five years or longer. During that time, illness, retrenchment or other life events may disrupt your income. Understanding what safeguards are available, whether through credit life insurance, payment relief options or other provisions, can provide essential peace of mind. These protections may seem unnecessary when finances are stable, yet they become most valuable when circumstances change.

What is the true cost of ownership?

The purchase price is only one part of the equation. Insurance premiums, fuel costs, maintenance, interest rate increases and depreciation all affect affordability over time. A vehicle with a R5,000 monthly instalment can easily cost R7,500 per month once the full cost of ownership is considered. Failing to account for these expenses can place sustained pressure on household finances.

How does your deposit impact long-term risk?

A larger deposit reduces the amount financed, lowers monthly repayments and decreases the total interest paid over the loan term. It also offers protection against early depreciation. Owing more on a vehicle than its market value can create vulnerability if the car needs to be sold or is written off.

South Africa’s vehicle finance market has evolved to offer increasingly flexible repayment structures, making car ownership more accessible than ever before. While this flexibility can be beneficial, it can also mask affordability challenges. An instalment that consumes 25% to 30% of monthly income may appear manageable initially but leaves limited room to absorb rising living costs or temporary income disruptions. Financial advisers generally recommend that total vehicle-related expenses should not exceed 15% to 20% of gross monthly income.

“It is critical to fully understand your finance agreement before signing,” adds Gaoaketse. “Consumers should always ask what flexibility exists if they need to restructure payments temporarily, whether early settlement penalties apply, what happens if the vehicle is written off, and whether there are options to reduce monthly commitments if needed. Knowing the answers upfront creates confidence and can prevent significant financial hardship later.”

When approached thoughtfully, vehicle finance can offer real value, enabling access to reliable transport while preserving capital for other priorities. The key is to treat it as a long-term financial commitment, not just a monthly expense. Focusing beyond whether this month’s instalment fits this month’s budget allows consumers to make decisions their future selves will thank them for.