Car Finance - What is the average rates nowadays?

SeRpEnT

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Hi all,

Currently in the market to buy a new car. To get an idea what I can afford I need to know what the current interest rates are on average as I have no idea whatsoever what the rates are.
What would be an average rate?
What would be a good rate?

Thanks in advance!
 

neoprema

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I find this doesn't help as the mafia car sales industry force you to use theirs.

I got a good rate from ABSA on my own, car dealership said no they can only work with finance done through their finance person. Applied for same with their finance person and got a higher interest rate. I told the lady at ABSA vehicle finance who said no if they say they do finance through ABSA they HAVE to accept your contract done with us as well.
Salesperson gave me a schpeel about how then they cannot be liable for any finance problems, and the documentation will be delayed by while blah blah.

In the end I stuck through it and got my car at the deal i got from ABSA directly with the better interest. But yeah, shopping around seems to be against the car dealers.
 

SauRoNZA

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Prime.

So long as you stay away from balloon payments and residuals that is what you'll get.
 

nazmo

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Its really hard to get close to prime if you young/havent really financed before. But maybe see what your peers, people of similar age, experience are getting.

Avoid Balloon UNLESS you know what you doing, buying as if you leasing, or you a business.

Most importantly, set a budget, then buy something thats 20% less. Dont EVER buy something you can afford in relation to your maximum finance worth. Its laughable when i see people with GTI's complain about petrol, tires etc...
 

SeRpEnT

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So prime would be 10% right now.... and as somebody who is now buying his 5th car (since the 1990s) I should have a good credit record...also checked it out online on a rating agency last year and my credit record is good - It would not be unreasonable to expect them to offer me 10%? If more then by a maximum of maybe 1% tops?

Yeah definitely not looking at balloon payments. Also going for affordable this time...downscaling from a 2l guzzling more than 10l/100km to a 1.2 litre doing 5.2l/100km so I anticipate big petrol savings too...
 

Barbarian Conan

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I find this doesn't help as the mafia car sales industry force you to use theirs.

I got a good rate from ABSA on my own, car dealership said no they can only work with finance done through their finance person. Applied for same with their finance person and got a higher interest rate. I told the lady at ABSA vehicle finance who said no if they say they do finance through ABSA they HAVE to accept your contract done with us as well.
Salesperson gave me a schpeel about how then they cannot be liable for any finance problems, and the documentation will be delayed by while blah blah.

In the end I stuck through it and got my car at the deal i got from ABSA directly with the better interest. But yeah, shopping around seems to be against the car dealers.
Similar story.
The dealership applied with all the finance houses on my behalf, and came back saying absa was the cheapest with prime +0.3%, with Nedbank (my bank) being around prime +1%.
Before I signed, I went to Nedbank who said I can't apply on my own with them since the dealership already applied, but they will find out why they gave me such a bad rate. Lo and behold, they said they gave me prime, and that the dealership lied to me.
Before fetching the car, I called them saying that Nedbank gave me prime, and I expect the paperwork to be ready for the Nedbank loan when I go to fetch the car.

A friend also had a Toyota dealer try and sell him a worse, more expensive third party warranty than the Toyota one when buying a used car from them.

Kickbacks everywhere, do your homework.
 

Solitude

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That's very interesting. Wish I knew that before I bought my car last year.
 

ambroseg1

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Was also screwed over by the local Volvo dealer like this. You live and you learn.
 

Bunta

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The dealers will push for you to take finance through them, they get a share of that. In fact most of their money comes from that.
You're no obligated to use their offer. Apply directly to your bank, in fact, apply to a few banks directly yourself. Play them against each other.
 

ambroseg1

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The dealers will push for you to take finance through them, they get a share of that. In fact most of their money comes from that.
You're no obligated to use their offer. Apply directly to your bank, in fact, apply to a few banks directly yourself. Play them against each other.
This ^. I discovered that on the R350k finance they were applying for on my behalf, they would pocket about R20k in commission.
 

nazmo

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I always contact my banker, wife contacts hers, and we tell the dealer thats what we got, beat it...
Wife works for a bank, so we pretty much just go with her finance. Prime minus 2.5 ftw
 

droidx

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Agreed with the above.
Their commission depends on the credit rating of the individual.
When I bought my car, their commission dropped significantly as I insisted on prime or I would do the deal elsewhere.
They got on a call with the bank and made it happen.

They are not motivated to get you the best deal as it hits their pockets. So if you have alternative options for finance, they will take what they can get.

Seen it over a few vehicle purchases by family over the last 2 years. Also had a chat with the f&i guy where I bought my car. He gave me the numbers at the time, just can't recall it now.
 

ToxicBunny

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Prime to Prime +1% is a fairly decent rate these days...

When I bought my car, I said to the dealer I had an interest rate in my head that I was willing to accept, but I refused to tell him what it was... Told him that he can apply, and I will accept or decline the deal based on that.... Got Prime + 0.5% ultimately...
 

neoprema

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Can someone explain the problem with the balloon?
Is it only a problem if the vehicle is sold early?

My sister took a car with a balloon. Kept it for 6 years and now has to settle for a new car. Even with the balloon being settled she's getting a nice big deposit in the difference in trade-in vs owed value for her new car's deposit. So what did she loose exactly?
 

SauRoNZA

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Can someone explain the problem with the balloon?
Is it only a problem if the vehicle is sold early?

My sister took a car with a balloon. Kept it for 6 years and now has to settle for a new car. Even with the balloon being settled she's getting a nice big deposit in the difference in trade-in vs owed value for her new car's deposit. So what did she loose exactly?
It’s just a problem if there an affordability concern and the person wouldn’t be able to lake the payment without doing the balloon.

Then they get stuck in a perpetual cycle of debt upgrading from one car to the next.

Hard to say if your sister is in the same boat of needing to upgrade the car or doing so voluntarily.

Usually the instalment stays the same but the balloon just grows and grows until it all blows up down the line.
 

Gtx Gaming

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So prime would be 10% right now.... and as somebody who is now buying his 5th car (since the 1990s) I should have a good credit record...also checked it out online on a rating agency last year and my credit record is good - It would not be unreasonable to expect them to offer me 10%? If more then by a maximum of maybe 1% tops?

Yeah definitely not looking at balloon payments. Also going for affordable this time...downscaling from a 2l guzzling more than 10l/100km to a 1.2 litre doing 5.2l/100km so I anticipate big petrol savings too...
Hopefully 5.2 is not quoted from the website, and rather you tested and checked it actually gets 5.2.

Those 1.2L turbo pots sometimes need work card to get going and don't actually get the rated fuel consumption.
If you getting a N/A 1.2L then will probably be closer to that 5.2
 

Crowley

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I bought two cars two weeks ago. I got 10.5% from ABSA for my Audi and 11% from MFC for my mothers Hyundai.

As stated elsewhere I couldn't expect prime -anything because of historical reasons so for me it was fine.
 

SeRpEnT

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Hopefully 5.2 is not quoted from the website, and rather you tested and checked it actually gets 5.2.

Those 1.2L turbo pots sometimes need work card to get going and don't actually get the rated fuel consumption.
If you getting a N/A 1.2L then will probably be closer to that 5.2
That.
 
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