UNDERSTAND
THE 'FINANCE' UMBRELLA
Financing - this refers to any method of purchasing a vehicle where someone else pays for the vehicle for you and you pay them back in installments
Learn more on WhatsAppMost brokers swap 'Hire Purchase' with 'Finance' to sound more professional causing a grey area of understanding.
We are transparent so before signing contracts, checkout these important facts for common finance options:
TYPES OF
FINANCE
-
LOAN
InstallmentsImmediate OwnershipPurchase CompleteLike any loan, you borrow a lump sum from a lender. You buy the car using this money and pay back the lender every month.
With a loan you own the vehicle.
-
HIRE PURCHASE
InstallmentsImmediate OwnershipPurchase CompleteThis is the most common option offered by 'finance' brokers and banks
For a HP, the lender owns the vehicle. You still pay monthly, like a loan, but you ownly own the vehicle after the last monthly payment is made.
Unlike Carfin, some brokers and banks don't tell you that you might have to pay an 'option to purchase' fee to actually take ownership after the last payment
-
DEALER FINANCE
InstallmentsImmediate OwnershipPurchase Complete -
LEASE AGREEMENT
InstallmentsImmediate OwnershipPurchase CompleteNo option to buy
REQUIREMENTS IN SOUTH AFRICA
- Valid ID
- Valid Driver's License
- Salary more than R10 000
- Vehicle purchase more than R40 000
- Vehicle newer than
- Clear Credit Score
Note: candidates under debt review will be rejected
EDUCATION IS
PROTECTION
It's no secret the car market can be 'dodgy' especially when applying through a broker.
Sales reps are going to throw around terms like linked / fixed interest, baloon payments and surprise fees like 'on the road'.
Read up on some important concepts before you sign.
ALL ABOUT REFINANCE
Refinancing your vehicle loan can be a powerful financial tool — but only if you understand how it works. In this article, we break down what refinancing is, when it makes sense, and how it can help reduce your monthly premiums, eliminate balloon payments, or secure better terms based on your improved credit profile.
BALOON VS DEPOSIT
Both balloon payments and deposits affect the cost structure of your car finance agreement — but they work in very different ways. This article explains the pros and cons of each, how they impact your monthly repayments, and which option might be more suitable for your budget and long-term plans.
BEWARE DEALER
TAXES & FEES
Car dealerships often include hidden costs in your vehicle purchase — from admin fees to sneaky VAT adjustments and extended warranties. This article uncovers the most common dealership charges, how they inflate your total cost, and what to look out for before signing your finance agreement.
FIXED, LINKED AND PRIME
INTEREST EXPLAINED
Choosing between fixed, linked, and prime-based interest rates can be confusing — but it's crucial to understand how each affects your monthly payment and total loan cost. This guide breaks down the differences clearly, helping you make smarter financing decisions whether interest rates rise or fall.