More Than Meets the Eye
When shopping for a new car in South Africa, it’s easy to focus on the sticker price. But there’s a bigger picture—and it often involves a number of hidden costs that many buyers don’t anticipate. If you're not prepared, you could find yourself spending thousands more than expected.
Let’s unpack what those additional expenses are and how you can prepare for them.1. What On-the-Road (OTR) Fees Really Cover
OTR costs are often overlooked but are necessary to make your car road-legal. These typically include:

  • Licensing and registration (NaTIS)
  • Number plates
  • Roadworthy certificate (for used cars)

Depending on where you are in the country and the car’s type, these can add R4,000 – R6,000 to your bill.2. Delivery and Admin Fees from the Dealership
Even if you’re collecting your vehicle in person, dealerships charge delivery/admin fees. These cover vehicle cleaning, licensing processes, and more.
Cost range: R3,000 – R5,000. These fees are sometimes negotiable—don’t be afraid to ask.3. Vehicle Finance Initiation Fees
Financing your car? Expect to pay a bank initiation fee of R1,000 – R1,200, set by the National Credit Act. Some dealers may also charge a separate finance handling fee.4. Interest Over Time and Credit Insurance
A vehicle loan might look affordable monthly—but over time, interest adds up. Loans are usually set at the prime lending rate plus a percentage based on your credit profile.
Also, banks might add credit life insurance, protecting the loan if something happens to you. This can increase your monthly payment.
A R250,000 car could cost over R400,000 after six years of payments.5. Balloon Payments Explained
A balloon payment is a large lump sum due at the end of your loan term. It lowers your monthly instalment but creates a major final bill.
These typically range from 30% to 35% of the vehicle’s purchase price. Be sure you have a plan to settle it or refinance when the time comes.6. Extended Warranty and Service Plan Options
While some new cars come with service plans, others don’t. You may be offered optional extras like:

  • Mechanical warranty extensions
  • Prepaid service plans
  • Tyre and battery coverage

Prices vary but can range from R5,000 to R20,000. For used cars especially, these can be worthwhile.7. Tracking System Installation
Most finance companies or insurers require a tracking device. Installation can cost R1,000 – R2,000, with ongoing monthly subscriptions of R100 – R200.
Confirm if this is bundled into your insurance quote or if it needs to be arranged separately.8. Car Insurance Premiums
Insurance is mandatory for financed cars and essential for all car owners. Premiums depend on your age, car type, location, and driving history.
Monthly premiums range from R600 to R2,000+.
Always compare quotes before committing to a car—some models carry high premiums due to theft risk or repair costs.9. Fuel and Maintenance
The real cost of owning a car starts after you drive it off the lot. Monthly fuel expenses typically range from R1,500 – R3,000, depending on how and where you drive.
Routine maintenance costs can add R2,500 – R10,000+ per year. Hybrid or premium models often cost more.10. Extra Products: Are They Worth It?
Dealerships may offer value-adds like:

  • Smash-and-grab tinting
  • Paint and upholstery protection
  • Tyre insurance
  • Rust proofing

While some are helpful, others may be overpriced. Typical bundle costs: R2,000 – R10,000. Compare pricing with third-party providers first.Conclusion: Know What You’re Paying For
Buying a car is a big commitment—and if you don’t factor in the full range of costs, you could end up over budget.
Before you sign anything, ask for a detailed cost breakdown and compare alternatives. It’s not just about the price of the car—it’s about the lifetime cost of owning it.
Informed buyers make smarter choices. Don’t be caught off guard.