Do you want your on-road-cost fee back?

Sumen

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It’s that fee which dealerships across the country routinely add to car deals, whether the buyer is paying cash or financing the purchase.

And it’s not a small amount - usually between R4000 and R5000 on cars with a purchase price of under R200 000! More for the higher end cars.

The National Credit Regulator is going after not the dealerships, but their bank partners which finance those deals, saying they have no legal right to add that fee to their contracts.

That’s because the Regulator doesn’t have a mandate to “police” the motor dealerships - only the credit providers.

So the banks which finance these car deals are the credit providers, or, in the case of* BMW Finance and VW Finance, the finance arms of the motor manufactures.

It’s those two which the Regular issued compliance notices to last month, one after the other, but it won’t end there - the car finance divisions of the major banks will be getting their compliance notices soon.

In a nutshell, the Regulator says the National Credit Act does not allow for the charging of an on-the-road fee.

The credit providers can and do charge an initiation fee. They can add an extended warranty, the cost of delivery, if the buyer doesn’t collect the car themselves - plus a tank of fuel and licence or registration fees.

But they can’t pad those costs.

As for what the on-the-road fee covers, in almost all cases, the dealership doesn’t routinely elaborate - the fee just lands up on the contract without a break-down. And those who query it are usually told something like “it’s a standard fee to cover the preparation of the vehicle for sale”.

And if you push for a break-down, you’re told things like a pre-delivery check, valet, fuelling and even gifts for the new owner, such as flowers, champagne and a giant bow around the new set of wheels.

One dealership once memorably listed a percentage of his monthly operating costs - rental, staff, even the car washer and security guard.

All valid operating costs, of course, but they should be incorporated into the advertised price of a car, not added on the back end of a contract. That’s the transparent way to price a product.

When confronted, the dealership will invariably say that the fee was disclosed at the time of the sale and the buyer consented to it and put their signature to the contract, knowing that there’s no way anyone can prove that there was no verbal disclosure.

So of course the aspect of these compliance notices which has got consumers very excited is the Regulator has ordered those two credit providers to do an audit and refund that on-the-road fee to every consumer which was charged it, and bear in mind that the Credit Act has been in force for 10 years..!

Given that the on-the-road fee generally ranges between R3000 and R7000 - that’s a lot of money.

So naturally, I’m hearing from a lot of car buyers, wanting to know how they get their on-the-road fee refund.

Here’s what you need to know for now:

-None of this applies to cash deals. The on-the-road fee may not be included in a credit agreement - that’s what the Reguator’s issuing of compliance notices is about.

-So far only BMW Finance and VW Finance have been handed compliance notices and told to refund those who had the fee added to their finance* agreement. And they are appealing the move anyway, so this is going to drag out.

-If your car was financed by any other bank or credit provider, this doesn't apply to you. Yet - the Regulator is far from done on this issue.

So if the fee was added to your credit agreement, with whatever bank, the Credit Regulator wants to hear from you -
email complaints@ncr.org.za. remember to attach your credit agreement as evidence.

For me, the biggest thing to come of this is far more people now know what an on-the-road fee is and that it can’t be added to credit agreement.

To my mind it shouldn’t be charged at all, no matter whether the car is financed or paid for in cash.

So if you’re in the process of buying a car, and you see it added to an offer-to-purchase document, question it, and refuse to pay for anything extra (beside the actual car’s extras) beyond licensing and registration and a fee to cover the dealership arranging that for you and a tank of fuel.

Source:https://www.ecr.co.za/news/consumerwatch/-road-fee-says-credit-regulator/
 
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lived666

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I have also negotiated to have that **** removed from the purchase price. Always eventually found a dealer that would play ball - not all, some were stubborn, **** them, there is always someone who needs to make a target and will play nice.
 

supersunbird

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I don't want it back, I just want it added on the price on the windscreen going forward...
 

cr@zydude

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I don't want it back, I just want it added on the price on the windscreen going forward...

My main hope. We don't accept this kind of crap in other industries, why allow car dealers not to advertise the actual selling price.
 

Arthur

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Here’s what you need to know for now:

-None of this applies to cash deals. The on-the-road fee may not be included in a credit agreement - that’s what the Regulator's issuing of compliance notices is about
That's ambiguous - what precisely does that mean?

1. That any purchase on credit may not include OTR fees whatsoever, even if the OTR fees do not form part of the credit agreement?

OR

2. OTR fees may be charged but they cannot be paid on credit, ie form part of the loan from the financial institution?

Important difference.
 

supersunbird

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That's ambiguous - what precisely does that mean?

1. That any purchase on credit may not include OTR fees whatsoever, even if the OTR fees do not form part of the credit agreement?

OR

2. OTR fees may be charged but they cannot be paid on credit, ie form part of the loan from the financial institution?

Important difference.

OTR fees may be charged but they can not be on the loan statement...
 

Everyones-a-Wally

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I don't want it back, I just want it added on the price on the windscreen going forward...

Agree. They will find another way to add it - it's part of their profit strategy one way or another. For those that don't want to / have to charge it, the windscreen price will be lower and they'll get more foot traffic.
 

cr@zydude

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That's ambiguous - what precisely does that mean?

1. That any purchase on credit may not include OTR fees whatsoever, even if the OTR fees do not form part of the credit agreement?

OR

2. OTR fees may be charged but they cannot be paid on credit, ie form part of the loan from the financial institution?

Important difference.

2

The NCA regulates which fees can be part of a credit agreement and number plate or other on the road fees aren't allowed.

Dealerships will be allowed to charge the fees, but can't include them in credit agreements. You could be forced to pay the fees upfront.
 

supersunbird

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2

The NCA regulates which fees can be part of a credit agreement and number plate or other on the road fees aren't allowed.

Dealerships will be allowed to charge the fees, but can't include them in credit agreements. You could be forced to pay the fees upfront.

Its seems they can charge some of the cost legally enough, but not inflate it.

In a nutshell, the Regulator says the National Credit Act does not allow for the charging of an on-the-road fee.

The credit providers can and do charge an initiation fee. They can add an extended warranty, the cost of delivery, if the buyer doesn’t collect the car themselves - plus a tank of fuel and licence or registration fees.

But they can’t pad those costs.
 

chromedome

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Thread necro alert: I'm a bit confused buy all this, if I pay cash for a car do these fee's still apply?
 

"D"

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I'm a bit confused buy all this, if I pay cash for a car do these fee's still apply?
Here’s what you need to know for now:

-None of this applies to cash deals. The on-the-road fee may not be included in a credit agreement - that’s what the Reguator’s issuing of compliance notices is about.
Same page, in the first post.
 

"D"

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NCA regulates which fees can be part of a credit agreement and number plate or other on the road fees aren't allowed.

Dealerships will be allowed to charge the fees, but can't include them in credit agreements. You could be forced to pay the fees upfront.
So if you’re in the process of buying a car, and you see it added to an offer-to-purchase document, question it, and refuse to pay for anything extra (beside the actual car’s extras) beyond licensing and registration and a fee to cover the dealership arranging that for you and a tank of fuel.
Bottom line: Shop around until you get a dealership that can charge you those fees, but who won't charge you those fees.
 

Tman*

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Soon there may be a drop in pricing for 2017 - 2019 model vehicles due to a potential sudden market flood, according to some.
LOL, car salesman will probably say: yano boet, this damned COVID made all the prices go up! Even the 2017-2019 models! You dont want to know what the 2020's cost, this is a bargain!
 
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LCBXX

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Does anyone know why is the regulator only going after specific financing houses, although both of the above are white-labelled Wesbank financing?
 
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