If Transport & Fuel is one of the budget categories in which you record the highest spend each month, you’re not alone. It seems it only takes a few days for a tank of petrol to go from full to empty. Those tanks aren’t getting any cheaper either. The petrol price has increased by nearly 85% since 2010 and we’ve just seen yet another increase. But petrol isn’t the only cost that comes with owning a car.
Although we all need a means of getting around, the cost of owning a car is high. An alternative option is to use a ride-hailing app – like Uber, Bolt or inDrive. You may have given it some thought already or read an article in the past, but there’s new information you need to factor in.
So what are the new things to consider?
There are a few things you may want to keep in mind, which may result in less use of your car. While you’re not driving, your car is still costing you.
1. In the new Road Traffic Amendment Bill, there’s a zero-tolerance policy on driving while under the influence of alcohol. This orders that no driver may have a blood/alcohol reading of anything more than 0%. Having a glass of wine or a beer at a restaurant would put your blood/alcohol above 0%. A single drink after work won’t cut it anymore either.
2. If your new normal is working fully or partly from home, you’ll be driving far less.
3. We’ve all become more tech savvy or know what options are out there. Online shopping has reduced our reliance on cars too.
Let’s run the numbers
If you own a car, you’ll need to calculate the following:
- What’s your monthly car insurance premium?
- If you have motor vehicle financing, what are your monthly repayments?
- Estimate how much you spend on petrol per month. You can see what your Transport & Fuel expenses are using 22seven or do the following:
- We suggest recording the change in kilometres on your speedometer over a 30 day period to accurately estimate your distance travelled in a month.
- Find out what your car’s average fuel consumption is – e.g. 9km per litre.
- Take your estimated distance travelled per month, divide it by the car’s average fuel consumption and then multiply it by the current price of petrol.
- We’ve estimated that parking, cleaning and licensing for the average person would come to around R625 per month.
- Cars depreciate at anything between 15-30% per annum. Find out the value of your car by doing an online search or see your car’s estimated value in 22seven, multiply by 22.50% (the middle of 15-30%) and divide by 12 to calculate the average monthly depreciation.
Add these five expenses and divide by your average distance covered in a month. This is the amount it costs you per km to own a car.
To save you time, we’ve estimated these expenses by looking at an average South African who drives 40km per day in a Toyota Corolla. The estimated cost per km would be around R10.
How much does an UberX cost?
An UberX taken in Johannesburg or Pretoria will cost R8 per km and an additional R0.80 per minute fare (with no surge charge). Uber is slightly cheaper in Cape Town, Port Elizabeth and Durban, but let’s use the Johannesburg/Pretoria pricing.
At average urban traffic conditions, we’ve calculated an average cost per km of roughly R9.75.
The estimated cost per km of owning a car or taking an UberX are similar – R10 vs R9.75. If you’re driving an average of 40km a day, you’ll save about R3,600 a year. The less you drive, the larger this number becomes. Furthermore, we haven’t factored in the time you could spend in a Uber being productive – like emailing and taking phone calls.
Owning a car is convenient and gives you independence. To some, it’s also considered a status symbol. But are these factors worth the financial stress of being in debt or not being able to make your payments at the end of the month when circumstances change? If you need to save or reduce expenses, run the numbers for yourself and see how much you could save by using a ride-hailing app.