Car Finance FAQ's?

[Sheks]

I've just gone through the financing process to acquire my new vehicle (all sorted).

I do want to educate myself on how the process works though?

At the dealership, I was horrified to see cars being offered with finance terms of 72 months and 50% residuals. What do the banks base affordability on? 30% of gross is what I've heard whether it's correct or not is a different story.

But surely even if you can afford the repayments on that car it cannot possibly be considered affordable - i.e. at the end of 6 years you still owe them a hell of a lot.

My second question is approval time - seemed to take an age to clear? Do credit checks and the like take about a day to process?

 

[Drifter]

Do credit checks and the like take about a day to process?

Up to a week in some cases.

 

[Dark Agent]

I've just gone through the financing process to acquire my new vehicle (all sorted).

I do want to educate myself on how the process works though?

At the dealership, I was horrified to see cars being offered with finance terms of 72 months and 50% residuals. What do the banks base affordability on? 30% of gross is what I've heard whether it's correct or not is a different story.

But surely even if you can afford the repayments on that car it cannot possibly be considered affordable - i.e. at the end of 6 years you still owe them a hell of a lot.

My second question is approval time - seemed to take an age to clear? Do credit checks and the like take about a day to process?

Approval Time is less then 30 minutes if all information is correct.

Also before going through finance, make sure you get an comprehensive insurance quote. It's a requirement for vehicle finance.

30% of gross is on home loans. Car finance is slightly different, R6500 gross income, got approved for installment amount of R2677pm(R102000 finance over 48 months no balloon amount) exclude insurance. Since I just started work and got my licence, my insurance was R2800 pm. But my credit score rating was all excellent.

Interest is between prime - 18%. Average is 15%.
https://www.wesbank.co.za/partners/calculators/repayment.xhtml?siteID=fnb

Use the above calculator to get to know installment(exclude insurance).

 

[Dark Agent]

Rough Idea of the process
Find a car you like or cars you like.
Use calculator with 15%(it should be lesser but safer to use 15%) to see if you can afford it.
Get a insurance quote.
If all happy.
Get pre-approve finance, Wesbank will tell you an amount and reference number.
You go to dealer with reference number and they will basically redo everything and give you a official quote.
Wesbank you sign online agreement. Some banks you sign a form and email.
You get insurance for car and give them the document to dealer to upload to bank.
About couple hours you can drive away with car.

My last car purchase took 2 hours, beside the insurance took a day to get document from them due to technical issues.