Beware: the hidden costs of owning a car

The Citizen

17-05-2025

A car is the second most expensive purchase you will ever make and it is important to keep all the hidden costs in mind.
Owning a car does not only mean making sure that you can afford to repay the bank every month. There are many hidden costs that you should consider before you buy a car to ensure you can really afford your wheels.
As living costs increase, South African consumers are rethinking how they buy and maintain their cars, Heide de Lange of Motor Plan Direct, says.
'Inflation may be slowing, but over 80% of South Africans remain deeply concerned about the rising cost of living, especially when it comes to cars. A car should offer you freedom, not financial strain, but too often what looks affordable upfront ends up costing far more over time.'
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Beware of hidden costs
From financing traps to maintenance surprises, De Lange offers these seven strategies to help consumers keep their car costs under control:
#1: Beware the 84-month trap: Long payment terms may reduce your monthly instalments but often increase total interest paid by up to 50% due to compounding interest. Similarly, balloon payments may lower short-term costs while leaving you with a hefty final bill. Choose the shortest repayment period you can afford and aim to put down a larger deposit.
#2: Avoid 'creative' finance: Step payments or deferred plans assume rising salaries, but real-life expenses like school fees and healthcare costs often grow faster. Consider less risky alternatives like guaranteed future value (GFV) deals. These offer predictable end-of-term options while keeping repayments manageable.
#3: Account for rising maintenance costs: Vehicle upkeep is increasing by 6% to 8% annually. A basic R2 000 service in 2015 might cost more than R4 000 today. Luxury models can cost significantly more in tyres, parts and labour. Plan for it by opting for cars with affordable parts and servicing and build maintenance into your budget.
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#4: Avoid insurance shortcuts: High-excess policies may seem like a saving, but when accidents happen, they can leave you exposed. It is a short-term saving that can lead to major expenses at claim time. Instead, look for flexible cover that allows mid-term upgrades or downgrades and reduce risk through smarter driving and parking habits.
#5: A used car is not always better than a new one: Used cars continue to outsell new ones, driven by affordability but some new brands like Haval, Chery and LDV offer competitive pricing and features rivalling premium cars. Whatever you choose, prioritise service history, warranty and long-term value. Consider a maintenance plan to reduce the risk of unforeseen expenses.
#6: Build protection into the budget: An extended warranty or service plan may seem like a grudge purchase, but it offers fixed costs and shields you from expensive surprise costs like repairs for mechanical failures. It is important to remember that it is not just about the cost but about confidence.
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