Financing a Vehicle

[Venomous]

Venomous, those are special conditions. If you are medically unfit to drive a car, special permission may be granted by the bank to grant you finance if you have a driver who does the driving for you. The driver will be the dedicated driver on the insurance and you the owner. Under no circumstances are you allowed to drive the car.

No parent has ever bought a child a car, in the parent's ever before?

Think bikes, not all parents buying bikes have bike licenses...

other vehicles and other reason's exist as well.
I think you work from a textbook, not actual life experiences.

 

[memyselfandi]

Venomous, I am working with vehicle finance. It is my job. The original question was about car finance. I say again; you can not buy a car without an appropriate license. It is illegal. The private individual who is doing the finance must have the license.

If you buy a car/bike cash or with a personal loan/second bond to give to your child, you do not need a license as it is not vehicle finance.

For a boat you do not need a skippers license.

Anyone who wants to try to finance a car/bike without a license will waste their time.

 

[etwylite]

It is not illegal..there is no law against it. It may be a general banking requirement but the differentation between owner and operator makes it just like any other asset finance deal.

 

[Venomous]

Venomous, I am working with vehicle finance. It is my job. The original question was about car finance. I say again; you can not buy a car without an appropriate license. It is illegal. The private individual who is doing the finance must have the license.

If you buy a car/bike cash or with a personal loan/second bond to give to your child, you do not need a license as it is not vehicle finance.

For a boat you do not need a skippers license.

Anyone who wants to try to finance a car/bike without a license will waste their time.

You work there.

And I drive a vehicle bought in the manner you say is not possible. A vehicle for which the 2nd installment just got paid on 30 Nov.

Bank got told x person paying ( don't have the required DL). They got given copies of my DL submitted with paperwork.

The day the vehicle got released I had to submit some letter of cover from my insurance to show car is covered asof that day, with me listed as the primary driver.

This was the 3rd purchase done in the same way, the first was a few years ago.

 

[bwana]

So no one has been able to comprehensively answer my question. I'm pretty sure many other threads of 'Financing a vehicle' have been asked but I would like a complete answer.

Situation:

I have a license to operate the vehicle in question. I do not have the credit record to apply for finance (have been declined @ Wesbank & ABSA finance). So can I get my folks (specifically my dad) to finance the vehicle for me and then I will have the comprehensive insurance in my name?

If the answer is yes, how do I go about doing this?

When I financed my last car, through Wesbank, they insisted I register it under my wife's name as I don't have a SA license.

 

[XennoX]

Well look I want to finance a bike on my name - can't because I don't have a credit record. My dad doesn't have a learner never mind a driver license for a bike but he has an exceptional credit record. Wesbank asks you for a license when you apply by them, if you select 'No' you're automatically declined. This is my problem.

 

[Billy]

I have never been asked for a licence, but i was once refused a loan for a grand piano because I couldn't play chopsticks!

 

[Venomous]

Well look I want to finance a bike on my name - can't because I don't have a credit record. My dad doesn't have a learner never mind a driver license for a bike but he has an exceptional credit record. Wesbank asks you for a license when you apply by them, if you select 'No' you're automatically declined. This is my problem.

Don't apply online.

 

[Venomous]

I have never been asked for a licence, but i was once refused a loan for a grand piano because I couldn't play chopsticks!

 

[SauRoNZA]

Your dad must have the license. He buys the car through any bank. He takes out insurance as owner with you as regular driver. The bank does not even know or care if you exist. The debit order is on your dads name.

I will advise that you take out insurance that will settle the car if something happens to your dad and make sure that you are the heir of the car.

And at the end of it all you are back where you started without a credit record.

You WANT to have the loan in your name wherever possible OP, but it can be secured your father or other person acting as surety for yourself.


That way the credit is yours and the record that goes with it.

******

I bought my first motorcycle like this.

Finance agreement in my name, motorcycle registered in my name, surety by my father and insurance even on my father's policy as I still living at home.

My father doesn't have a bike license and therefore could legally ride the motorcycle, but he could insure it in my name on my behalf.

 

[Rocket-Boy]

Why are the banks declining your credit?
Is it because you dont have a credit record or because you dont meet criteria?
Getting a credit record that is a good reflection is easy but takes about 6 months.
Just open a bunch of clothing accounts then buy stuff you normally would have bought cash on your account. Pay the accounts up in full at the end of that month and rinse/repeat. You will have a record as a good payer and someone will have taken the plunge with low risk credit to begin with.

If you finance in your dads name then it will reflect on him regardless of whether you paid the installments or not.

 

[XennoX]

Don't meet the criteria is all that is stipulated. My disposable income is currently R7k pm and the bike I'm wanting to finance will have repayments in the region of R1600 pm over 54 months @ 12.5%. I'm also able to absorb an interest rate of 25%.

I went and opened an Edgars account on Sunday, got the card yesterday and blew R1600. Will then be a 'good citizen' and pay my 'debt' off monthly - hope I get brownie points for paying it off sooner as that is what I intend to do. Just aggravates me that I have to acquire debt to take on more debt. I can see the point in it, but it just aggravates me.

 

[Zenbaas]

Trying to go through this process for the first time as well.

Which banks should we apply to for finance? Wesbank and ABSA and who else? I see most people seem to go through Wesbank.

Also what interest rate am I realistically looking at currently ..? (I know this varies but on average)

 

[XennoX]

There is ABSA Vehicle Finance (from third party anecdotal evidence) don't go with them. Their rates are shocking for first time buyers. My mom got a rate of 15% for her first purchase from them.

There is also Wesbank. My dad uses them his rates were 12.0%, 11.5% and then finally 11.0% for his 3rd purchase. Their call centre agents and their online application prohibit third party financing.

There is also MFC from Nedbank. Didn't use them, but others swear by them and they supposedly allow third party financing.

Interest rates depend on risk and income I reckon. As a first time buyer you are considered high risk and thus the interest rate is high. The more financing you do with that specific group the lower the rate goes. Average seems to be 12.0 to 12.5% for first time buyer. That being said, BMW Finance was willing to offer me a rate of 11.0% as a first time buyer, but they will not do third party finance according to the BMW Finance rep at one of the dealers.

 

[Zenbaas]

Quick question. When financing a vehicle through the bank do you need to take out life insurance as well..?

 

[HapticSimian]

Quick question. When financing a vehicle through the bank do you need to take out life insurance as well..?

You're not compelled to, but there are two things well worth considering when financing a car. The first, in relation to what you're asking, is credit life cover - life insurance, basically, but only to the value of your agreement with the bank. The second is shortfall cover, which will cover any difference between insurance payout and settlement if you were to suffer a total loss on the vehicle.

 

[Zenbaas]

You're not compelled to, but there are two things well worth considering when financing a car. The first, in relation to what you're asking, is credit life cover - life insurance, basically, but only to the value of your agreement with the bank. The second is shortfall cover, which will cover any difference between insurance payout and settlement if you were to suffer a total loss on the vehicle.

Ah ok thanks Haptic. Do you think the shortfall cover is worth it...? (considering it's not that much extra PM)

 

[HapticSimian]

Ah ok thanks Haptic. Do you think the shortfall cover is worth it...? (considering it's not that much extra PM)

Like any insurance it's a grudge purchase at best, but I personally think the peace of mind is worth the (relatively) small price. If you were to lose your car you hardly need the added worry of owing a bank thousands with nothing to show for it.

 

[Londo]

I have never been asked for a licence, but i was once refused a loan for a grand piano because I couldn't play chopsticks!

I am glad. Gotta keep the amateurs away from grand pianos.

 

[OrbitalDawn]

There is ABSA Vehicle Finance (from third party anecdotal evidence) don't go with them. Their rates are shocking for first time buyers. My mom got a rate of 15% for her first purchase from them.

There is also Wesbank. My dad uses them his rates were 12.0%, 11.5% and then finally 11.0% for his 3rd purchase. Their call centre agents and their online application prohibit third party financing.

There is also MFC from Nedbank. Didn't use them, but others swear by them and they supposedly allow third party financing.

Interest rates depend on risk and income I reckon. As a first time buyer you are considered high risk and thus the interest rate is high. The more financing you do with that specific group the lower the rate goes. Average seems to be 12.0 to 12.5% for first time buyer. That being said, BMW Finance was willing to offer me a rate of 11.0% as a first time buyer, but they will not do third party finance according to the BMW Finance rep at one of the dealers.

Interestingly enough, Absa gave me by far the best rate, even as a first time buyer. Got 9.5%, which has gone up a bit due to the repo rate increase by the Reserve Bank.

What did you end up doing, or have you not made a decision yet? I'd reckon it's a good idea to get your credit record up as fast as possible. It's something that holds you back quite a lot later on if you don't have it.