Have you ever heard this story? Your friend decides to search the internet for used cars in South Africa and manages to find the perfect car. They arrange a test drive with the dealership and finally agree on a price with the salesman. However, when they go back to fetch their new car, suddenly there are all kinds of extras that the dealer didn’t mention before. The extras were meant to be part of the price of the car, but now your mate is asked to pay more than he budgeted for.
So now your friend faces a predicament: do they pay the extras and take the car? Or do they walk away and find another deal? We speak about what you should look out for when buying a second-hand car.
What are Additional Dealership Charges?
According to the law, a dealership can’t charge for extras on the vehicle that are already part of the sale of the car. However, there are many unethical car dealers, who tack on a nebulous ‘on-the-road fee’, sometimes called ‘dealership fee’ or ‘service and delivery fee’. Legally, this is in breach of the National Credit Act. According to the Act, the customer can refuse these costs.
It’s unlawful to add these charges to the car sale agreement, especially if none of it was previously disclosed to the customer. These costs can be anything from R4000 up.
Dealerships can only charge you for the following:
- Initiation fees
- fuel (actual cost of filling the tank)
- Delivery costs (only if the car is delivered to you)
- Extended warranties
- Licence and registration fees
You are not expected to pay for: valet, admin, permits, pre-delivery inspections, 20-point check, client gifts, manual and service books.
Tips for Buying Affordable Used Cars
Purchasing a pre-owned car is a great option when shopping on a budget. But you must know what to look out for.
Searching for A Used Car
It’s important to have a budget and a price cap on what you can afford. Consider your monthly instalments, car insurance as well as a tracking device, the addition of which might get you cheaper insurance premiums. When buying a used car, look at things such as fuel consumption, safety features, maintenance and service costs.
Dealership vs Private Sale
Car scams are everywhere; you must do your research to avoid getting conned. If you’re thinking about approaching a dealership, you might want to check that said dealership is part of the National Automobile Dealers’ Association (NADA). There are more opportunities for underhanded dealings in private sales, so make sure you can trust the person selling you the car.
Because there are so many car buying scams in South Africa, you must make sure the car isn’t stolen. Whether you’re buying from a dealership or private person, all you need is the vehicle Identification Number (VIN). You can easily check for this online. Once this is cleared, you should check the car’s mechanical history. A dealership should be able to provide this information. When buying a car through a private sale, be sure to ask for a roadworthy vehicle inspection certificate.
Once you’ve done your research on affordable second-hand cars and approached someone for a purchase, you can start the negotiations. The process can be long especially if you gave good reasons as to why the asking price should be lowered. Compare the price you’re offered against the market value of the car (i.e. what a dealership is offering). Remember that if you’re not happy with the offer, you can walk away from the deal.
Once you do reach an agreement, all that’s left is for you need is to sign the purchase letter and pay a deposit for surety reasons. The deposit amount can vary based on whether you’re buying the car cash or financing a portion of the vehicle’s cost through a bank.
When it comes to buying a car, you want to get the most out of your money. Be aware of car scams and the tricks pulled by dealerships. Always get a lawyer to look over your documents before signing them as legal jargon can be hard to understand. Not knowing enough about the law can be a disadvantage to you and your family. With legal cover, you get access to 24-hour legal assistance when you need to make that call. Get a quote today!