Car finance interest rates

ToxicBunny

Oi! Leave me out of this...
Joined
Apr 8, 2006
Messages
107,273
Over the process of this deal, the dealer also tried to sneak in a price increase on the vehicle and claim it was due to the increase in vat when challenged on it...
 

Dylan_G

Expert Member
Joined
Nov 12, 2011
Messages
2,401
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.
I thought you could only "pay extra" into a bond?
 

3WA

Honorary Master
Joined
Sep 25, 2012
Messages
16,901
I thought you could only "pay extra" into a bond?

Many car loans also allow extra payments. I dumped some cash in mine; now every month an interest rebate shows up as a credit on my statement.
 

Gamer

Expert Member
Joined
Apr 2, 2004
Messages
2,936
I am currently at prime minus 1% linked with Wesbank.
I am buying a new vehicle and got new offer from another finance house that I must use in order to get the discount offered on the vehicle.
I told them up front that the maximum I can afford is prime rate linked, no residuals or balloons, otherwise no deal.
They sent me offer yesterday, 10% (prime) linked over 48 or 60 months. Exactly what I asked for.
I'd like to think my demand had some effect on their offer ;)
 

supersunbird

Honorary Master
Joined
Oct 1, 2005
Messages
58,902
I thought you could only "pay extra" into a bond?

You can pay extra into any loan. Loans that started with over R250 000 loan amounts do attract the 3 months interest penalty though as explained (SA home loans even waived that for me because "good client"). Some home loans are called access home loans, that allow you to later access the extra money you have put in over time. Maybe that what you are thinking about.

And if some can't, as 3WA says, then its probably not a loan as per NCA, but something else.
 

Dylan_G

Expert Member
Joined
Nov 12, 2011
Messages
2,401
Many car loans also allow extra payments. I dumped some cash in mine; now every month an interest rebate shows up as a credit on my statement.
So effectively, the duration of the loan term decreases?
 

Dylan_G

Expert Member
Joined
Nov 12, 2011
Messages
2,401
You can pay extra into any loan. Loans that started with over R250 000 loan amounts do attract the 3 months interest penalty though as explained (SA home loans even waived that for me because "good client"). Some home loans are called access home loans, that allow you to later access the extra money you have put in over time. Maybe that what you are thinking about.

And if some can't, as 3WA says, then its probably not a loan as per NCA, but something else.
Ah cool, thanks.
 

supersunbird

Honorary Master
Joined
Oct 1, 2005
Messages
58,902
So effectively, the duration of the loan term decreases?

Well, depends on the credit providers systems on what they do by default (from what I can gather). Some keep drawing the same amount per debit order (thus shortening the period), others reduce the amount drawn while keeping the period the same (so no period shortening, but interest paid is still lower). One should ideally phone them and tell them what they should do with the extra amount.
 

ToxicBunny

Oi! Leave me out of this...
Joined
Apr 8, 2006
Messages
107,273
Well, depends on the credit providers systems on what they do by default (from what I can gather). Some keep drawing the same amount per debit order (thus shortening the period), others reduce the amount drawn while keeping the period the same (so no period shortening, but interest paid is still lower). One should ideally phone them and tell them what they should do with the extra amount.

Yeah... communicate with the credit provider as to what you would like to happen with the additional deposits....

Personally Capital Reduction is the best option as it frees up monthly cash flow....
 

shadow_man

Executive Member
Joined
May 27, 2005
Messages
5,942
What are the current rates people are getting on vehicle finance? I’m with FNB and have a bond at 5.85% - could I get anywhere close to that as a PC client or would I be better taking out the bond? (I know Investec was doing prime -1% on vehicles a while back).
 

initroot

Senior Member
Joined
Jul 30, 2011
Messages
882
I got worse rates from Investec on my house (prime - 0.75%) than on my vehicle (prime - 1%). Did another application for investment prop last week, rate was prime - 0.25%.
 

6spdmanual

Expert Member
Joined
Jul 3, 2015
Messages
4,083
What are the current rates people are getting on vehicle finance? I’m with FNB and have a bond at 5.85% - could I get anywhere close to that as a PC client or would I be better taking out the bond? (I know Investec was doing prime -1% on vehicles a while back).
Remember a few months ago being offered a fixed rate of 9% and variable of about 7% I think with Wesbank.
 

shadow_man

Executive Member
Joined
May 27, 2005
Messages
5,942
Thanks - being offered 7% (prime) on a CC - but I doubt the dealership would let me pay on one (nice eBucks) and then I could shift my bond over to pay off the CC.

The Wesbank option is also interesting due to the double eBucks earn on fuel spend.
 

ToxicBunny

Oi! Leave me out of this...
Joined
Apr 8, 2006
Messages
107,273
Thanks - being offered 7% (prime) on a CC - but I doubt the dealership would let me pay on one (nice eBucks) and then I could shift my bond over to pay off the CC.

The Wesbank option is also interesting due to the double eBucks earn on fuel spend.
If your cc has the limit to swipe they might let you swipe... You never know until you try.
 

Priapus

Executive Member
Joined
Jun 8, 2008
Messages
9,214
Thanks - being offered 7% (prime) on a CC - but I doubt the dealership would let me pay on one (nice eBucks) and then I could shift my bond over to pay off the CC.

The Wesbank option is also interesting due to the double eBucks earn on fuel spend.
Have you asked yourself if you really need to buy a car on finance?
 

shadow_man

Executive Member
Joined
May 27, 2005
Messages
5,942
Have you asked yourself if you really need to buy a car on finance?
I need some form of finance yes - be it bond or vehicle finance. I have equity in my bond, but it's still going to attract a % interest cost to take it out.
 

SauRoNZA

Honorary Master
Joined
Jul 6, 2010
Messages
44,734
Yeah... communicate with the credit provider as to what you would like to happen with the additional deposits....

Personally Capital Reduction is the best option as it frees up monthly cash flow....

If you need cash flow then you bought a car outside of your means in the very first place.

Pay that **** off as quickly as possibly and save on interest.
 

SauRoNZA

Honorary Master
Joined
Jul 6, 2010
Messages
44,734
Thanks - being offered 7% (prime) on a CC - but I doubt the dealership would let me pay on one (nice eBucks) and then I could shift my bond over to pay off the CC.

The Wesbank option is also interesting due to the double eBucks earn on fuel spend.

Never heard of a dealership who wouldn’t take a credit card swipe for a purchase.
 

SauRoNZA

Honorary Master
Joined
Jul 6, 2010
Messages
44,734
For a full vehicle? There's a thread here somewhere where @Sinbad or @xrapidx (can't remember) struggled to find a dealer to let them buy tyres on CC.

Wtf.

I’ve never bought tyres with anything else.

And I know plenty of people who have bought motorcycles on their credit card so can’t see why cars would be different.
 
Top