Experience with a vehicle settlement process?

[thestaggy]

I am in the fortunate position to have sufficient funds available to make a once-off payment to settle my car well before it needs to be paid off. Now, I've never done this before (first car was bought cash). I've logged in to my Wesbank account and had a settlement quotation drawn up. They make it pretty straight forward; give you their bank details and ask you to deposit the quoted settlement amount into their account on or before a specified date. Upon depositing they ask that you contact them and arrange for the vehicle papers to be handed over.

I know I can call a client service centre but I just want to know if someone has recent experience doing this with Wesbank and is it as simple as it sounds? Do I have to go into an FNB/Wesbank branch to receive my papers and finalise/close the contract?

 

[bromster]

Phone them for a settlement value.
Make the transfer. I forgot to increase my payment limit on internet banking.
Fax proof of payment.
They phone you when they receive it and explain what happens next.
I received all my car papers by courier thereafter.

Congrats ^_^

 

[midnightcaller]

Silly question here : what's the point of paying off the loan if you have already paid off most off the interest in the 1st two years?

The last time I financed a car was in 2008. So I'm not up to date with how car finance works these days.

 

[bromster]

What's the point in leaving a balance on the contract and paying admin fees if you have a good credit record?

 

[midnightcaller]

What's the point in leaving a balance on the contract and paying admin fees if you have a good credit record?

I don't understand.

If there is a balance then doesn't it reduce every month by the monthly installment.

 

[bromster]

Every month Wesbank takes your money and splits it. They put as much of it as legally possible towards the interest portion of your loan. This essentially goes straight into Wesbank's pocket, and does not actually pay off the car at all. Then they charge you the legal maximum admin fee of about R80. This also goes straight into their pockets, because they don't really do any kind of admin, except send you an automatic e-statement every month.

The remaining pennies actually go towards paying off your car's Principal Debt. Scum of the earth.

That is why it is important to pay extra into your car every month. Wesbank has already stolen their monthly maximum from you for that month, so any extra money immediately goes towards the principal debt, which has a knock-on effect and reduces your overall interest too. Just be careful to avoid penalty fees if you want to pay in extra cash. If I remember correctly, you may not be charged penalty fees on loans less than R200k.

 

[Sinbad]

Every month Wesbank takes your money and splits it. They put as much of it as legally possible towards the interest portion of your loan. This essentially goes straight into Wesbank's pocket, and does not actually pay off the car at all. Then they charge you the legal maximum admin fee of about R80. This also goes straight into their pockets, because they don't really do any kind of admin, except send you an automatic e-statement every month.

The remaining pennies actually go towards paying off your car's Principal Debt. Scum of the earth.

That is why it is important to pay extra into your car every month. Wesbank has already stolen their monthly maximum from you for that month, so any extra money immediately goes towards the principal debt, which has a knock-on effect and reduces your overall interest too. Just be careful to avoid penalty fees if you want to pay in extra cash. If I remember correctly, you may not be charged penalty fees on loans less than R200k.

Rubbish. You are badly misinformed.

Firstly, the threshold for a large credit agreement is 250k.
Secondly, wesbank calculate interest monthly. They deduct your payment from the CAPITAL owing, them they charge interest on the outstanding amount back to the account.
Also, the admin fee is R50 plus vat.

Staggy yes it is that simple.

 

[Sinbad]

Silly question here : what's the point of paying off the loan if you have already paid off most off the interest in the 1st two years?

The last time I financed a car was in 2008. So I'm not up to date with how car finance works these days.

You pay interest on the amount you owe that month. You're not paying off next years interest now.

 

[falcon786]

I am in the fortunate position to have sufficient funds available to make a once-off payment to settle my car well before it needs to be paid off. Now, I've never done this before (first car was bought cash). I've logged in to my Wesbank account and had a settlement quotation drawn up. They make it pretty straight forward; give you their bank details and ask you to deposit the quoted settlement amount into their account on or before a specified date. Upon depositing they ask that you contact them and arrange for the vehicle papers to be handed over.

I know I can call a client service centre but I just want to know if someone has recent experience doing this with Wesbank and is it as simple as it sounds? Do I have to go into an FNB/Wesbank branch to receive my papers and finalise/close the contract?

It's as straight forward as that staggy.I also paid of my car with standard bank two years ago using a lump sum,I called them they emailed me a settlement letter with banking details,I did the transfer and sent them a copy a few days later the funds cleared on their side(i had to call them to verify this as there was a days delay) and then a few days later they informed me they had sent my papers and proof of settlement/clearance letter with a courier.

Sounds like wesbank does the same process.

I then promised myself to never buy another car through the bank again,I upgraded recently using money I saved up and it feels good not owing anybody money!

 

[supersunbird]

Silly question here : what's the point of paying off the loan if you have already paid off most off the interest in the 1st two years?

The last time I financed a car was in 2008. So I'm not up to date with how car finance works these days.

I settled my car at 4 years on a 5 years loan. In the process I saved a definite R684 which would have been the banks monthly admin charges of R57pm (maximum as allowed by the National Credit Act) and then whatever the interest still was left over. I think the Interest would have been around R3000.

Now I don't know about you, but about R3684 is not small change.

 

[midnightcaller]

R3k is not small change. I think I understand better now.
Last time I financed was in 2008. Have not bought a new car since.

 

[thestaggy]

Silly question here : what's the point of paying off the loan if you have already paid off most off the interest in the 1st two years?

The last time I financed a car was in 2008. So I'm not up to date with how car finance works these days.

There are 40 months left on the contract that amounts to R18,000 in interest. So, by paying it now I will save R18,000 in interest and if I save the installments as I plan to, I'm looking at a pretty decent saving.

 

[midnightcaller]

There are 40 months left on the contract that amounts to R18,000 in interest. So, by paying it now I will save R18,000 in interest and if I save the installments as I plan to, I'm looking at a pretty decent saving.

That is a massive saving.

 

[Dr Who]

I did the same and yes its that easy, just make sure that you settle within the time period indicated otherwise you will have a small balance owing as there will be accrued interest.

Your biggest schlep is taking the letter to the DMV within 21 days to transfer the ownership from wesbank to you. I forgot to do this once.

 

[KalMaverick]

Just curious, if you settle earlier what are the penalties involved? Seeing as whoever is financing the vehicle is no longer going to get that interest income any more?

 

[Sinbad]

Just curious, if you settle earlier what are the penalties involved? Seeing as whoever is financing the vehicle is no longer going to get that interest income any more?

No settlement penalty for medium or small agreements. (Less than 250k).
Large agreements 3 months interest. You can give 3 months notice of intention to settle and then not pay penalty.

 

[KalMaverick]

Every month Wesbank takes your money and splits it. They put as much of it as legally possible towards the interest portion of your loan. This essentially goes straight into Wesbank's pocket, and does not actually pay off the car at all. Then they charge you the legal maximum admin fee of about R80. This also goes straight into their pockets, because they don't really do any kind of admin, except send you an automatic e-statement every month.

Silly question here : what's the point of paying off the loan if you have already paid off most off the interest in the 1st two years?

I have no idea why this misconception is still so common. If each payment pays off 'only the interest' then the loan would never be repaid. In any case everything you're going to be paying is already calculated way before the first payment, you can even see for yourself what each payment is allocated to using a calculator.

The remaining pennies actually go towards paying off your car's Principal Debt. Scum of the earth.

If you actually understood how it works then would realise they aren't scum, an institution allowing you to actually get a car where normally it would not always be possible and then charging some fees and interest that is usually decent makes said institution scum?

As Sinbad said, badly misinformed.

No settlement penalty for medium or small agreements. (Less than 250k).
Large agreements 3 months interest. You can give 3 months notice of intention to settle and then not pay penalty.

Ah nice, thanks, that's actually quite decent.

 

[supersunbird]

Just curious, if you settle earlier what are the penalties involved? Seeing as whoever is financing the vehicle is no longer going to get that interest income any more?

Yeah, and you are no longer borrowing their money anymore... point where it is unbalanced/unfair in some way?

No penalties allowed as per National Credit Act. Loans over R250 000 you have to give 3 months notice, so either you pay the interest as penalty or you wait the 3 months after notice out.

 

[supersunbird]

Every month Wesbank takes your money and splits it. They put as much of it as legally possible towards the interest portion of your loan. This essentially goes straight into Wesbank's pocket, and does not actually pay off the car at all. Then they charge you the legal maximum admin fee of about R80. This also goes straight into their pockets, because they don't really do any kind of admin, except send you an automatic e-statement every month.

The remaining pennies actually go towards paying off your car's Principal Debt. Scum of the earth.

That is why it is important to pay extra into your car every month. Wesbank has already stolen their monthly maximum from you for that month, so any extra money immediately goes towards the principal debt, which has a knock-on effect and reduces your overall interest too. Just be careful to avoid penalty fees if you want to pay in extra cash. If I remember correctly, you may not be charged penalty fees on loans less than R200k.

Home loans work the same. Have you sent word to all credit providers you will not be using their facilities/products anymore?

Agree with the pay in extra when possible approach.

 

[KalMaverick]

Yeah, and you are no longer borrowing their money anymore... point where it is unbalanced/unfair in some way?

Guaranteed business.

I don't know, do people ever need reason to levy penalties.

Why did the NCA stop penalties from being levied in the first place and why only on amounts under R250k?