Premium German cars are increasingly out of reach for most South Africans, with even entry-level models requiring top 10% incomes. Picture Credits: Mikeshouts
By Aisha Zardad
South Africa – Owning a premium German car in South Africa has become a luxury reserved for the country’s top earners, as the cost of entry-level models from Audi, BMW, and Mercedes-Benz continues to soar well above inflation.
According to the latest TransUnion Mobility Insights Report, new vehicle prices increased by 1.5% year-on-year in the third quarter of 2025, with hatchbacks—the typical entry point for luxury brands—seeing a slightly lower increase of 0.7%. However, over the past decade, even these models have more than doubled in price, making them increasingly exclusive.
The Audi A1, currently the most affordable model among the three, is priced at R530,900, doubling from R265,000 in 2015. The BMW 1 Series now costs R713,395, while the Mercedes-Benz A-Class tops the list at R813,124, each reflecting a 109% price increase over the past ten years.
Several factors contribute to this sharp rise in vehicle prices. A weak rand and a sluggish local economy have made importing cars more expensive. Additionally, global supply chain disruptions, increased manufacturing costs, and heightened demand for premium features have all added to retail prices in South Africa.
These challenges have significantly impacted the premium car market. Combined sales for Audi, BMW, and Mercedes-Benz have dropped by 63.5% since 2014, reflecting both affordability pressures and competition from Chinese manufacturers, who offer competitive pricing, advanced technology, and solid build quality.
What You Need to Earn: The affordability challenge becomes even clearer when looking at the monthly financial commitment required to own these vehicles. Financial experts recommend that car repayments should not exceed 25% of monthly income.
For the Audi A1, financing over 60 months at an 11.5% interest rate results in a monthly repayment of R11,771, meaning buyers would need a minimum monthly salary of R47,100 to comfortably afford the vehicle. This places them in the top 10% of South African earners, underscoring the exclusivity of owning even the cheapest Audi model.
The numbers are even higher for BMW and Mercedes-Benz:
- BMW 1 Series: Price R713,395; Monthly instalment R15,785; Monthly income required R63,200
- Mercedes-Benz A-Class: Price R813,124; Monthly instalment R17,978; Monthly income required R71,900
These figures show that the majority of South Africans, approximately 90%, would struggle to finance these premium models without stretching their budgets significantly.
Shifts in the Market: The rising costs have also led to changes in consumer behaviour. More South Africans are exploring pre-owned luxury vehicles as a more attainable alternative, while others are turning to financing options that extend repayment periods beyond five years.
Dealers report that, despite high prices, demand for entry-level luxury vehicles remains steady among upper-income professionals, entrepreneurs, and executives, reflecting the prestige associated with German automotive brands.
Meanwhile, brands are responding with feature-rich packages, offering technology, safety, and comfort enhancements that justify higher price points, but further increase the financial barrier for first-time luxury car buyers.
Looking Ahead: As the gap between vehicle prices and average incomes widens, affordability will remain a key challenge for premium car brands in South Africa. Industry experts suggest that innovative financing options, fleet leasing, and digital sales platforms could help broaden access to these vehicles without diluting the brand’s luxury image.
In conclusion, while owning an Audi, BMW, or Mercedes-Benz remains a marker of prestige in South Africa, it is increasingly a privilege reserved for the nation’s top earners, illustrating how economic pressures and market dynamics shape luxury car ownership in 2025.
