Refinancing a vehicle

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GonzoTho

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I want to buy a car. I am not completely happy with the financing deal offered by the dealer and I don't have the time at the moment to shop around for finance options myself. However, I am quite desperate to get a vehicle ASAP. Would it be a bad option to just take the financing deal and then shop around afterwards for a better deal to refinance the principal amount at a better interest rate? Obviously there will be the administration fee that I would need to pay again, but are there other penalties/hidden costs I should be aware of?

I've been offered 13.5% fixed interest or 11% variable. This seems too much to me as my first car (2 years ago) was financed at 14% fixed. Since then I've upgraded to platinum status at the bank (which means a bigger overdraft) and I've settled the debt on the first vehicle. Am I being overly optimistic in thinking I could get a significantly better deal?
 
Nah dude, they messing you around, I got my first car financed through the Dealership, and they gave me prime +2% fixed, so that was just under 11%.

Also, this was my first real buy, didn't have a bond or anything like that. Maybe you have a bad credit rating? :D
 
F1 Fan said:
Why don't you just go directly to the bank and apply?
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Because I'm working non-stop. Currently in Tanzania and I don't have a car to get to the bank. If refinancing is a really bad option this is what I will do, though it will be a real hassle for me to achieve this. I'm willing to pay the finance admin fee if that is all that it will cost me if I take the first deal they give me and then have the car and time to shop around for a better deal on my own.

I'm just trying to get a better idea of the pro's and cons of doing it this way as opposed to shopping around before buying the car.
 
Spidey8085 said:
Nah dude, they messing you around, I got my first car financed through the Dealership, and they gave me prime +2% fixed, so that was just under 11%.

Also, this was my first real buy, didn't have a bond or anything like that. Maybe you have a bad credit rating? :D
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Thanks I thought so. I don't have a bad credit rating. Never missed a due payment on anything in my life.
 
GonzoTho said:
Because I'm working non-stop. Currently in Tanzania and I don't have a car to get to the bank. If refinancing is a really bad option this is what I will do, though it will be a real hassle for me to achieve this. I'm willing to pay the finance admin fee if that is all that it will cost me if I take the first deal they give me and then have the car and time to shop around for a better deal on my own.

I'm just trying to get a better idea of the pro's and cons of doing it this way as opposed to shopping around before buying the car.
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You don't need to go to the bank to apply for finance. You can online. One should be commit to something like this quickly. You might not get it refinanced, who knows.
 
Apart from applying on line, Prime +2 is not bad, depending on how much you are financing - last week that 11% would have been 10.5% which sounds better - Prime went up to 9% this last week.

A deal on Prime would mean that you are financing 350k plus - you didn't say how much you were trying to finance, as that is critical to the whole equation.

Re financing at a later stage is just throwing money away.
 
Fazda said:
Apart from applying on line, Prime +2 is not bad, depending on how much you are financing - last week that 11% would have been 10.5% which sounds better - Prime went up to 9% this last week.

A deal on Prime would mean that you are financing 350k plus - you didn't say how much you were trying to finance, as that is critical to the whole equation.

Re financing at a later stage is just throwing money away.
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I just financed R250k at prime so that is not always true. I also previously financed R140k at prime.
 
Car price is 125k. I have 25k deposit. Would it be better to finance without deposit?
 
Go to Wesbank's website and apply directly. No mess no fuss.

If you have the time to follow this thread then you have the time to do that.
 
Platinum should give you access to a personal banker, call them and get them to help you out.

Also the more you finance the better the rate you get, you can always pay it towards the capital amount after a month or two :)
 
Fazda said:
You obviously work with nicer finanacial people than I do! ;) :p
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I have figured out that many "finance" people at dealerships (I know I am generalising) just try a rate they think the banks will approve, usually at least prime +2 then just leave it there. That is how these systems work, they need to input a rate and see if the bank approves. I just tell them to put in prime and normally that goes through. One dealer was actually shocked when I told them to do this as they had never had finance approved at prime.
 
gifs said:
I have figured out that many "finance" people at dealerships (I know I am generalising) just try a rate they think the banks will approve, usually at least prime +2 then just leave it there. That is how these systems work, they need to input a rate and see if the bank approves. I just tell them to put in prime and normally that goes through. One dealer was actually shocked when I told them to do this as they had never had finance approved at prime.
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I actually managed marginally below prime. I started looking for cars and got a call from the bank, saying that they see I'm looking at cars and that they would like to finance the new one. Used the dealer's finance department too and the two had a duel for the lowest rate...

EDIT: I have to add that this was also on a higher amount. As mentioned before, the smaller the amount, the higher the rate.
 
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HapticSimian said:
One does not simply refinance a car... :wtf:
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Quite... :p

I was trying to work out how he would do it.

1. Sell it to himself

2.Settle with the bank

3. Take out a new finance package with a "nicer" bank

4. Start all over again with a greatly improved rate...;)

EASY! :D
 
Was thinking of doing this too. Friend who works at the Reserve Bank said I should take the fixed @ 14.5, vs 13.5 linked (im just assuming he knows what he's talking about since he works with the stuff everyday). 1st car. I feel its too high though... I saw there are businesses which do this kinda thing. Im guessing they "buy" the car from you, settle it, then sell it back to you after adding fees? im sure I could save abit even after added fees if I can manage 10% or less?
 
Even if it is possible ...

What rate do you expect?
What'll you save monthly? R100.00pm and R6,000.00 over the period?
And the admin fee would probably be 1/3 of that amount anyhow.

If it was a higher amount and rate they gave you was horrendous, I'd say pursue it. But on the value and with a 'decent' rate - I think you shouldn't even think about it
 
Dont go through the dealership but apply directly at the banks online. Dealerships get a cut, so the banks have to include their commission when quoting them the rate. Dont believe the story that the salesman will pitch you about clashing the banks against each other, till they get you a good rate, that just doesnt happen.
 
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