It’s been a whole year since the South African Reserve Bank hiked interest rates to 15-year highs, and this has cost the average car owner an estimated R832 per month or R10,008 over the past year in interest on their car repayments.
Interest rates have been kept at this level following the last policy rate decision a year ago, which is putting financial pressure on households that are also dealing with other increased expenses such as electricity, fuel, and bond repayments. This means those who bought a car at this value at the start of the hike cycle at 7% have been paying an extra R834 per month on their car loan at 11.75% .this works out to an extra R10,008 over the past year .
These additional expenses include the added costs of fuel, comprehensive insurance coverage, and general maintenance and service expenses, all of which have increased over the past year. Passenger car volumes were down 6.4% for the first five months of 2024 compared to a year ago. This has been blamed on the high cost of living in the country, which includes high interest rates.