The rising costs of motoring in SA
Dear Start My Car,
It’s not easy to be a South African in the current economic climate. The pressure is rising and along with it, the stress of keeping costs as low as possible. It is particularly interesting in terms of the motor industry. Below is an article from Wheels 24 that provides a lot of information with regard to this sector.
At Start my Car, we are aware of these pressures and work tirelessly to ease the burden. Have a look at what we have an offer on this week and let me know if it helps.
Give us a shout if there is anything that we can do.
The Cost Of Motoring
The interest rate cut and drop in petrol price during July is 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 the bank uses to track and calculate motoring 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 500km 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.
Ghana Msibi, WesBank Executive Head of Motor, said: "In 2014, fuel prices were on the rise and monthly fuel spend was roughly equal to an entry-level vehicle’s instalment.
"This is no longer the case, and despite monthly fuel price hikes from February to June 2019, this month’s fuel prices are actually lower than they were during July last year. This does not mean the cost of motoring is lower."
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 costs R321 715, while the average used vehicle costs R215 848.
This reflects only a 3% and 2% year-on-year change for new and used vehicles respectively. However, the interest rate cut will be welcomed by consumers with vehicle and home finance.
“Interest rate cuts and lower fuel costs are always welcome, but this shouldn’t influence a vehicle purchase. Motorists should take a holistic view when planning a car purchase and ensure that their budgets include the instalment amount, insurance costs, fuel money and savings for maintenance and services. Their budgets should also be able to absorb higher costs a few years down the line.
The smartest move is to plan for rising costs over the duration of the finance contract. Our mobility calculator is there to help consumers gauge the total costs associated with vehicle ownership,” concludes Msibi.
GUESS THE PART
LAST WEEKS WINNER:
‘Braking Up’ is Easy to Do
Give your workshop another ‘upper’ by offering pro brake checks and services
When motorists bring their cars in for a service, brake checks and services are invariably not on the job card. This is alarming, considering the safety-critical nature of a vehicle’s braking system and how frequently ‘brake failure’ is cited as the cause of road accidents.
Your workshop can take advantage of this oversight by offering brake checks and services to your customers that not only improve their motoring safety but also reduce their vehicle’s lifecycle cost.
Check for wear: The entire brake system should be checked, including (on disc and drum brake systems); brake fluid reservoir, master cylinder, brake lines/hoses, wheel cylinders, brake calipers, brake drums, brake shoes, brake discs and brake pads.
Clean & Lubricate: Heat, dust and rain do cause a fair amount of contamination within the brake calliper, drum and on the brake disc (aka rotor). In order to prevent sticking or seizing, clean and lubricate the slide pins and caliper brackets. Brake discs and brake drums are prone to rust so clean them well to prevent the dreaded brake ‘screech’ and ‘squeal’. Follow the same process for the parking brake components.
Replace with quality parts: As you www.startmycar.co.za dealer, you have preferential access to a wide range of OE-quality braking parts and components that are backed by a guarantee and free return policy.
ISO certified DOE brake cylinders are made from steel using matched components and are marked with a part number for traceability, as are DOE brake cylinder rubbers, making them NCRS compliant. These integrated units save servicing time and labour costs through a simple ‘bolt off, bolt on, then bleed’ replacement procedure.
The Rhyno range of brake pads from startmycar.co.za is comprehensive and made to OE specifications using high-quality materials. ARGUS MOTORING brake spring kits, brake hoses, caliper pin kits are all OE quality. DOE master cylinders are also OE accredited and are exactly the same as the original part to ensure ease of fitment.
Partner with a good machine shop: Grooved brake discs are extremely common on older vehicles and if not replaced, can be skimmed on a brake lathe machine, saving your customer a few hundred bucks.
Educate on better braking: Inform your customers via all your marketing channels that brakes should be checked at least once a year. Also inform them that ‘riding’ the brakes and braking harshly limit brake pad and brake disc life, thereby escalating their vehicle running costs.
Bottom line – Make brake safety and servicing your speciality and win the hearts and minds of your customers. ailer and keep it low-risk.