Navigating the 'extras' minefield

[Eugene]

The National Credit Act (NCA) states that credit granters may charge an initiation fee of no more than R1140 and a monthly service fee of no more than R57 but the motor finance houses are simply applying these maximum amounts routinely.

Many car salespeople are implying that the charges are mandatory.

Kagiso Kgasi, a legal adviser with the National Credit Regulator, pointed out: "We had to put maximum allowable fees in the act but the intention was for consumers to compare quotes from various dealers and negotiate."

So, if you are made to pay an initiation fee, you have to be given the option of paying it separately so that it doesn't inflate the amount being financed over four or five years.

As for the "delivery" fee allowed by the NCA, motor dealerships routinely added this to a contract, even though in most cases they don't actually incur any delivery costs - their clients make the journey to the dealership to collect their new purchase.

Full article on: http://www.motoring.co.za/index.php?...icleId=4125319

[Dave A]

As for the "delivery" fee allowed by the NCA, motor dealerships routinely added this to a contract, even though in most cases they don't actually incur any delivery costs - their clients make the journey to the dealership to collect their new purchase.

I've negotiated on that delivery fee before, with mixed results. The normal excuse is it is for the pre-delivery inspection, licensing and the like. Which makes me a little mad on the odd occasion when you take delivery of a brand new vehicle and find it has a fault that could have been discovered on a drive around the block.

Once we got one with the speedo cable disconnected! Mind you, back in the pre-digital days.

[QUINN]

Hi EUGENE
The maximum initiation fee could be as high as R5000 and banks like FNB charge the maximum.
In addition they use to charge R5 per month on I bond, Now they could charge up to R50.....most of the banks ow do charge as much as possible.
In my experience it seems that the NCA just facilitated an increase in charges for the banks