Vehicle finance query

[Messugga]

The missus is in the market for a new car. Now, I'm not one to purchase a new vehicle every year and prefer dealing in cash, when possible. This one's a bit more pricey and vehicle finance would be required.

Now, how would I go about getting the lowest interest rate possible? The finance lady at the dealership says that you want to pay zero deposit and select the maximum finance period (72 months). When I bought my current car, which I financed it only partially, I put down a pretty significant deposit, selected 60 months as a contract period, got an alright interest rate and paid in extra every month and settled the contract within less than a year.
According to said finance lady I won't be able to that with this car. In fact, she said that I can make only one additional payment over the contract period. That's a bit annoying. That also means we'll probably put down a larger deposit, which would then raise the interest rate.

Have I been informed correctly? What's the best way of handling this?

 

[ToxicBunny]

She is talking nonsense.

You can make additional payments if you so chose, whenever you chose.

To get the best interest rate, fight back and don't just accept the first rate they give you. Also possibly deal with the banks directly if you can.

 

[Sinbad]

The missus is in the market for a new car. Now, I'm not one to purchase a new vehicle every year and prefer dealing in cash, when possible. This one's a bit more pricey and vehicle finance would be required.

Now, how would I go about getting the lowest interest rate possible? The finance lady at the dealership says that you want to pay zero deposit and select the maximum finance period (72 months). When I bought my current car, which I financed it only partially, I put down a pretty significant deposit, selected 60 months as a contract period, got an alright interest rate and paid in extra every month and settled the contract within less than a year.
According to said finance lady I won't be able to that with this car. In fact, she said that I can make only one additional payment over the contract period. That's a bit annoying. That also means we'll probably put down a larger deposit, which would then raise the interest rate.

Have I been informed correctly? What's the best way of handling this?

That doesn't sound right at all. You can pay in as much as you want, as often as you want. If it's a "large" credit contract you may need to give 3 months notice of early settlement...

 

[Messugga]

That doesn't sound right at all. You can pay in as much as you want, as often as you want. If it's a "large" credit contract you may need to give 3 months notice of early settlement...

Vehicle value is a bit over 400k. She has informed me of the 3 month notification period which I have no problem with, it was the additional monthly payment that I would like to make that I wanted to clear up.

 

[Messugga]

She is talking nonsense.

You can make additional payments if you so chose, whenever you chose.

To get the best interest rate, fight back and don't just accept the first rate they give you. Also possibly deal with the banks directly if you can.

Yep, managed to drop my current vehicle's interest rate by 1.5% by simply saying no to the initial offer a few times.

 

[MandM]

Be careful of these finance ladies if they are based directly at the dealership. They get kick-backs from the banks, which may entice them to gently nudge you into the direction of a specific deal. Make sure that they checked with all the financial institutions and gave the exact same information through everytime.

 

[Sinbad]

From the national credit act:
Early payments and crediting of payments
126. (1) At any time, without notice or penalty, a consumer may prepay any amount owed to a credit provider under a credit agreement.
(2) A credit provider must accept any payment under a credit agreement when it is tendered, even if that is before the date on which the payment is due.

(3) A credit provider must credit each payment made under a credit agreement to the
consumer as of the date of receipt of the payment, as follows:
(a) Firstly, to satisfy any due or unpaid interest charges;
(b) secondly, to satisfy any due or unpaid fees or charges; and
(c) thirdly, to reduce the amount of the principal debt.



*edit - wow - cut and paste fail. Fixed.

 

[hellfire]

The missus is in the market for a new car. Now, I'm not one to purchase a new vehicle every year and prefer dealing in cash, when possible. This one's a bit more pricey and vehicle finance would be required.

Now, how would I go about getting the lowest interest rate possible? The finance lady at the dealership says that you want to pay zero deposit and select the maximum finance period (72 months). When I bought my current car, which I financed it only partially, I put down a pretty significant deposit, selected 60 months as a contract period, got an alright interest rate and paid in extra every month and settled the contract within less than a year.
According to said finance lady I won't be able to that with this car. In fact, she said that I can make only one additional payment over the contract period. That's a bit annoying. That also means we'll probably put down a larger deposit, which would then raise the interest rate.

Have I been informed correctly? What's the best way of handling this?

You haven't been informed correctly. You can pay in whenever you want.
Your interest rate is based on loan size and duration, but also your overall risk. If you pay zero deposit and select the maximum finance period you'll probably be penalised on rate as if you default the bank can't recover what you owe them by selling the car. A large deposit will almost always bring down your risk and thus your interest rate.

 

[Messugga]

You haven't been informed correctly. You can pay in whenever you want.
Your interest rate is based on loan size and duration, but also your overall risk. If you pay zero deposit and select the maximum finance period you'll probably be penalised on rate as if you default the bank can't recover what you owe them by selling the car. A large deposit will almost always bring down your risk and thus your interest rate.

Cool stuff, thanks. I like to approach these things with a healthy dose of paranoia and think it's best to query with more experienced people.
Glad I understood it correctly. I'll do it over 60 months, do a bit of a deposit and pay extra in every month.

 

[ToxicBunny]

Be careful of these finance ladies if they are based directly at the dealership. They get kick-backs from the banks, which may entice them to gently nudge you into the direction of a specific deal. Make sure that they checked with all the financial institutions and gave the exact same information through everytime.

Also this.

I had to fight with a finance lady once because she told me she had submitted to all banks, and was showing me only the best option. She couldn't produce the other offers when I asked for them, and after a fight it turned out she had submitted to only one bank.

I walked away from that dealership very quickly.

 

[Messugga]

Also this.

I had to fight with a finance lady once because she told me she had submitted to all banks, and was showing me only the best option. She couldn't produce the other offers when I asked for them, and after a fight it turned out she had submitted to only one bank.

I walked away from that dealership very quickly.

Getting the vehicle at cost, so walking away isn't really an option. Walking away from their finance department however, is. That being said, she said she'll submit it to their list of banks/finance houses as well as others I may request.
I'll be sure to ask for proof of offers from the various entities - thanks for the tip.

 

[ToxicBunny]

Very much doubt you are getting the vehicle at cost, if you are just a regular customer. The salesperson is telling you porky pies in that instance.

 

[Messugga]

Very much doubt you are getting the vehicle at cost, if you are just a regular customer. The salesperson is telling you porky pies in that instance.

Not a regular customer

 

[hellfire]

Not a regular customer

Can you get the rest of us cars at cost?

 

[Messugga]

Can you get the rest of us cars at cost?

Maybe? The dealership gets kickbacks just by moving units.

 

[OrbitalDawn]

Yeah, that's pure horseschit, as the others have said.

Cool stuff, thanks. I like to approach these things with a healthy dose of paranoia and think it's best to query with more experienced people.
Glad I understood it correctly. I'll do it over 60 months, do a bit of a deposit and pay extra in every month.

Best way to do it, I think. I also took it over a longer term to get a bit of a lower interest rate. But will pay it off quicker, anyway.

What car is it, btw?

 

[Messugga]

Yeah, that's pure horseschit, as the others have said.



Best way to do it, I think. I also took it over a longer term to get a bit of a lower interest rate. But will pay it off quicker, anyway.

What car is it, btw?

GTI with some bells and whistles. Nothing too exciting but the wife wants a hatchback and isn't mad about Audi and BMW. Merc A-class is disappointing.

 

[OrbitalDawn]

GTI with some bells and whistles. Nothing too exciting but the wife wants a hatchback and isn't mad about Audi and BMW. Merc A-class is disappointing.

Awesome vehicle.

 

[Messugga]

Awesome vehicle.

Test drove a R and it's glorious but 530k after some options is simply too much...

 

[Dolby]

It's quick though - that's what you're paying for.

It's probably A45 league as stock - and R130,000 less. A chip takes it to late 4's to 100km/h and a car length gap with an A45