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Cost of Owning a Car: How to Budget for Expenses

Owning a car comes with the joy and freedom of driving, but it also comes with more financial responsibilities than meets the eye. Beyond the monthly payments or the initial purchase price, hidden expenses can catch you off guard if you’re not prepared.

In this article, we’ll provide an overview of the types of costs associated with owning a car and share budgeting tips to help our fellow South African drivers navigate these expenses wisely.

The Hidden Costs of Car Ownership

From fuel costs and maintenance to insurance premiums and licence fees, the expenses associated with having a car can add up quickly. It’s crucial to have a good understanding of these costs before committing to a vehicle and to develop a practical budget for the year.

Planning for the Year Ahead

Consider creating a budget at the beginning of the year to avoid financial surprises. After all, there’s no time like the present to take control of your finances for the rest of 2024. This proactive approach allows you to save small amounts consistently, preventing these costs from significantly affecting your bank balance.

We suggest you start with larger categories in your budget and then fill in the details as specifically as possible.

These budgeting tips for the New Year are also helpful if you want more guidance.

Financial Instalments

We’re kicking off with the biggest and most obvious category – car loan instalments. These are the monthly average costs you expect when buying a car.

Most South Africans can’t afford the lump sum of purchasing a vehicle upfront, so usually get a vehicle finance loan from the bank to pay for it and then pay the bank back over a set period.

It’s crucial to make sure you understand this contract before going into it – so do not skip over the fine print before signing.

Remember to confirm the interest rate, balloon payment options and any other administration fees associated with your car payment that might go unnoticed at first.

Car Licences and Renewal Costs

Don’t overlook the expenses that come with renewing your car licence disc. This cost depends on your vehicle size and weight, fuel type, and the province in which you live. This is an annual cost, so you’ll have to budget for one month of the year to carry the extra load.

Another essential renewal cost to keep in mind is your actual driver’s licence. This card needs to be renewed every five years. So, keep track of the renewal dates and budget for them in advance. Learn more about the processes of renewing your car licence if you’re unsure.

Maintenance Costs and Services

Whether you have a service plan for your vehicle or not, unforeseen wear and tear costs associated with maintaining a car always creep in. In addition to yearly service costs to keep your vehicle in good working order, you’ll need to pay for things like tyres, wheel alignment, brake pads and spare parts.

Learn more about other factors affecting the cost of owning a car and discover the importance of maintenance plans and warranties to manage your long-term expenses.

Car Insurance

Navigating the realm of car insurance is a critical aspect of budgeting. Luckily, your car insurance premium doesn’t have to consume your entire salary.  PMD offers affordable and reliable insurance to suit every budget. Explore our unique benefits on offer to you.

Plus, PMD offers a hassle-free online application process that allows you to get a quote without the need for lengthy phone calls and hold times. Discover the convenience of buying car insurance online and say goodbye to traditional methods. Find out why buying car insurance online is a smart and time-saving choice.

Petrol or Diesel Costs

Fuel costs significantly contribute to the overall expenses of owning a car. Stay informed about fluctuating fuel prices, plan your trips wisely, and stick to the average monthly fuel amount set in your budget.

Remember to budget wisely for those longer trips over the holiday periods throughout the year.

Extra Costs

Beyond the obvious expenses, additional costs might not be immediately apparent but can impact your budget. Parking fees, toll charges, and regular car washes are part of the broader financial picture of owning a car.

Perhaps you can collect all the loose change your family accumulates for these kinds of expenses.

Join the PMD Family

Owning a car comes with its challenges, but with careful budgeting and informed choices, you can navigate the expenses effectively. PMD is here to support you with affordable insurance options and top customer service.

Take charge of your car ownership journey today, and join the PMD family.


This article provides general information about budgeting for the average car. Always follow the South African law and rules of the road to ensure your safety, as well as the safety of your fellow commuters.

Remember to always buy car insurance with much thought and only through a certified financial services provider.

Reach out to us today to learn more about getting affordable, comprehensive car insurance with fixed premiums* and a reduce-to-zero excess*. *T&Cs apply.

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