Car finance interest rates

[Mike7]

I applied for finance through a dealer and received approval from MFC for the loan at a linked interest rate of 15.5% and fixed rate of 16.5%. WTF? This makes no sense to me. When I bought my previous car back in 2015 my interest rate was 13% fixed and I settled the debt within 3 years. This was with Wesbank. I have no debt and a good credit record. Is this dealer trying to screw me over?

I also asked for the breakdown of all costs and apparently finance and admin fees amount to R4k and license and registration is R3.5K.

 

[UrBaN963]

I applied for finance through a dealer and received approval from MFC for the loan at a linked interest rate of 15.5% and fixed rate of 16.5%. WTF? This makes no sense to me. When I bought my previous car back in 2015 my interest rate was 13% fixed and I settled the debt within 3 years. This was with Wesbank. I have no debt and a good credit record. Is this dealer trying to screw me over?

I also asked for the breakdown of all costs and apparently finance and admin fees amount to R4k and license and registration is R3.5K.

Just tell them o go back to the bank and negotiate a better rate. Tell them you want 11, see what they come back with. Then apply with another bank and play them against each other. If you have a good credit record there’s no reason to pay those amounts.

 

[Dark Agent]

I applied for finance through a dealer and received approval from MFC for the loan at a linked interest rate of 15.5% and fixed rate of 16.5%. WTF? This makes no sense to me. When I bought my previous car back in 2015 my interest rate was 13% fixed and I settled the debt within 3 years. This was with Wesbank. I have no debt and a good credit record. Is this dealer trying to screw me over?

I also asked for the breakdown of all costs and apparently finance and admin fees amount to R4k and license and registration is R3.5K.

16.5% is too high. 14.5% and below is reasonable.

 

[The_MAC]

I recently financed a car and got 10.55% (Linked) from Wesbank, I had to negotiate a bit.

why can't you go back to Wesbank?

That admin fee is steep

 

[Mike7]

Just tell them o go back to the bank and negotiate a better rate. Tell them you want 11, see what they come back with. Then apply with another bank and play them against each other. If you have a good credit record there’s no reason to pay those amounts.

I don't even care about the car anymore I'm more interested in finding out why I'm getting this high interest. I applied to wesbank online for finance and got approved but they don't give the interest rate. On the wesbank site they give your credit score and mine is 90/100.

16.5% is too high. 14.5% and below is reasonable.

14.5% fixed?

I recently financed a car and got 10.55% (Linked) from Wesbank, I had to negotiate a bit.

why can't you go back to Wesbank?

That admin fee is steep

I did and got approved but they don't give the interest rate. I need to take the reference I received from wesbank to the dealer.

According to the dealer this was the lowest rate received from all Banks.

Normal admin fee?

I will follow up with Wesbank later today.

 

[The_MAC]

Normal admin fee?

Mine was R997, but then again it was a private car sale.

If I remember, years ago when I was silly enough to buy a new car, it was R3500

 

[ToxicBunny]

Interest rates at the moment are retarded, as are all the tack on fees..

Just looking at getting another car..

Was offered 14% fixed, or 13.2% linked...
But the dealership was tacking on a R1500 2 in 1 auto care package (no details), R3990 documentation fee (no details) and R495 for number plates.. all those figures are ex vat as well.

 

[blowdart18]

I applied for finance through a dealer and received approval from MFC for the loan at a linked interest rate of 15.5% and fixed rate of 16.5%. WTF? This makes no sense to me. When I bought my previous car back in 2015 my interest rate was 13% fixed and I settled the debt within 3 years. This was with Wesbank. I have no debt and a good credit record. Is this dealer trying to screw me over?

How is the deal structured ?

1. Is the a deposit ?
2. Any balloon ?
3. Are you trading in your vehicle ?
4. How many months is it over ?
5. What vehicle are you buying ?
6. What is the principle amount ?

 

[Nithan15]

had the same issue

Standard Bank offered me a lower rate than Wesbank but the dealer was pushing Wesbank very hard ( I think they give them a better kick back), when I insisted on Standard Bank the dealer went to Wesbank and got the rate matched.

 

[3WA]

The dealer's first offer is always very heavily inflated. They essentially try their luck and see if you fall for it.

Laugh in their faces, the next offer will be more reasonable.

 

[Mike7]

Mine was R997, but then again it was a private car sale.

If I remember, years ago when I was silly enough to buy a new car, it was R3500

Can I ask for a breakdown of all these "costs"?

Interest rates at the moment are retarded, as are all the tack on fees..

Just looking at getting another car..

Was offered 14% fixed, or 13.2% linked...
But the dealership was tacking on a R1500 2 in 1 auto care package (no details), R3990 documentation fee (no details) and R495 for number plates.. all those figures are ex vat as well.

Which bank?

How is the deal structured ?

1. Is the a deposit ?
2. Any balloon ?
3. Are you trading in your vehicle ?
4. How many months is it over ?
5. What vehicle are you buying ?
6. What is the principle amount ?

I'm putting down 150k deposit on car that costs 275k. Over 72 months no balloon.

The dealer's first offer is always very heavily inflated. They essentially try their luck and see if you fall for it.

Laugh in their faces, the next offer will be more reasonable.

Will try this even though I might not take the car.

 

[Barbarian Conan]

had the same issue

Standard Bank offered me a lower rate than Wesbank but the dealer was pushing Wesbank very hard ( I think they give them a better kick back), when I insisted on Standard Bank the dealer went to Wesbank and got the rate matched.

This.

The dealer I bought my car from flat out lied about which bank gave the lowest rate. When I went to my bank and asked them why they gave me such a crap rate, the lady called around a bit, then told me they didn't. They gave me a lower rate than the supposed lowest rate the dealer told me about.

As for "14.5% and below" linked being reasonable.... lol.
More than prime + 1% is already a bitter pill for me to swallow, anything more than prime +2% will be laughed at.

 

[The_MAC]

Can I ask for a breakdown of all these "costs"?

From me or them?

Mine was a single figure, R3500 for admin/facilitation blah blah

 

[SauRoNZA]

I applied for finance through a dealer and received approval from MFC for the loan at a linked interest rate of 15.5% and fixed rate of 16.5%. WTF? This makes no sense to me. When I bought my previous car back in 2015 my interest rate was 13% fixed and I settled the debt within 3 years. This was with Wesbank. I have no debt and a good credit record. Is this dealer trying to screw me over?

I also asked for the breakdown of all costs and apparently finance and admin fees amount to R4k and license and registration is R3.5K.

So go back to them and say exactly that as you stated above that your previous loan arrangement was at 13% and you paid up well and expect a better rate.

Remember you can easily say no and you can also push back and tell them to bugger off and make a better offer.

First try is almost always the highest and most people accept it so they always win.

 

[supersunbird]

I'm putting down 150k deposit on car that costs 275k. Over 72 months no balloon.

There is part of your problem. They are only financing R125 00 and they want to make money off of that, so higher interest rate.

What one does it get the car financed with smallest/no deposit possible, preferably so that the financed amount is just under R250 000 (if above R250 000 one would need to give 90 days notice or pay 3 months interest as penalty if you try to settle early.

The interest rate offered should be lower because a bigger amount is loaned.

Then a month or 2 after you first payment goes off you put that saved money into the car loan.

 

[Mike7]

So called Wesbank and they referred me to the FnI at the dealership?

 

[marhsava]

and it's illegal for the dealer to charge you any on the road cost according to NCR.

https://goo.gl/NjUSxn

 

[blowdart18]

There is part of your problem. They are only financing R125 00 and they want to make money off of that, so higher interest rate.

You beat me to it, the bank probably feels that they won't make the same return thus the higher interest rate.

 

[blowdart18]

and it's illegal for the dealer to charge you any on the road cost according to NCR.

https://goo.gl/NjUSxn

No its not illegal for a dealer to charge on the road cost, they are fully entitled to charge this amount and recoup this money from you as a customer. If you signed for it as part of the OTP then you have agreed to pay those costs.

However it is illegal to finance this fee under your finance deal and that is the problem the NCR has.

 

[ProfA]

NEVER let a dealer apply for vehicle finance on your behalf. I just busted a dealer red-handed that told me only Wesbank approved my financing. I have acquaintances at Standard Bank who not only discovered that Standard had approved my finance, but at a lower interest rate. And yes, they did give this info to the dealer.

I will make a comprehensive thread about this when the scumbags have delivered my vehicle for fear of some sort of reprisal if I air their dirty laundry.