Fairland, Gauteng -- (SBWire) -- 05/14/2013 --With millions of South African consumers still under financial pressure in the current economic climate, managing the costs involved of owning and running a car can play a major role in reducing monthly expenses.
Given the challenges of our public transport system, owning a car is vital for millions of South Africans. However, it is also one of their biggest monthly expenses. It is therefore crucial that people investigate all avenues where they can save on the cost of owning and running a car.
Fuel:
According to Chris De Kock, Executive Head of Sales and Marketing at WesBank, a good place to start is with fuel costs. Over the last few years, the rising fuel price has resulted in this becoming one of the biggest expenses associated with owning a car, with the price of petrol currently topping R10 per 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 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%.
A recent WesBank survey showed that motor dealers are increasingly concerned about the impact of rising fuel costs, with 26.5% of respondents listing it as a negative factor likely to affect future sales.
De Kock says there a number of ways to cut down on your monthly fuel bill.
These include:
- Cutting down on, share combine journeys
- Buying a fuel-efficient car if possible
- Drive more responsibly. A car has the greatest fuel efficiency at about 100kph. If you accelerate hard from 100kph to 130kph, there will be a large increase in fuel consumption
- Maximise car efficiency: making sure your car is regularly serviced and running smoothly will often result in better fuel efficiency
Monthly Instalments
Instalment payments are often the largest portion of monthly expenses associated with owning a car. Here are some useful tips when it comes to managing your instalment payments
- 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 find yourself unable to meet your monthly instalments, speak to the financing company sooner rather than later to discuss a solution.
Monthly running costs
Running costs are the actual costs that depend directly on you using your vehicle. These costs are primarily tolls, tyres, servicing and repair costs.
Keeping your car in tiptop condition can help reduce the running costs of your vehicle, below are some tips on what you can do:
- 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.
Insurance
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. However, it is also important to ensure you are getting good value for money from your insurance cover.
- 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.
“Spending some time focusing on each of these factors will enable you to shave a considerable amount off your monthly expenses of owning a car, which in the current market conditions, is very valuable indeed,” concludes De Kock.
* Our Mobility Calculation Model is based on an entry level vehicle costing R100k in 2007 increasing by CPI rate compounded annually, travelling an average of 2000 km per month running on Unleaded 93 Inland. Financed with a 10% deposit at prime +2% over 60 months with no residual value (Source: WesBank Calculators, SAPIA and AA websites).
About Wesbank
WesBank has over 40 years of experience in asset and vehicle finance. As a leading asset-based finance provider in South Africa, we finance new and used vehicles for personal use, both privately and through dealerships, as well as leisure vehicles, and also offer expert advice and professional service to our clients.
Our other main focus is providing quality asset finance and fleet management solutions for a number of market sectors. WesBank’s asset finance services cover aviation finance, agri finance, commercial vehicle finance, company vehicles, plant equipment, office equipment, public sector finance and franchise finance. In addition, we offer personal insurance, vehicle insurance, personal loans as well as business insurance, and we are perfectly placed to structure a finance deal to suit your needs.
WesBank is a division of FirstRand Bank Limited, which in turn, is part of the FirstRand Group. FirstRand is South Africa's most innovative Bank Assurance Group with interests in Retail and Merchant Banking, Life Assurance, Financial Planning and Medical Schemes. For additional information please visit, https://www.wesbank.co.za/.
WesBank Releases New Tips to Consumers for Reducing Monthly Car Expenses