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Just Group Africa Vehicle Loans

Just Group Africa ranks amongst the Top 5 car dealerships in the country. They have achieved this through what seems to be an innovative business model; offering consumers partly subsidised monthly instalments in exchange for displaying advertising on the rear windows of their vehicles.

The low premium offered is made possible by entering into an advertising contract with Just Group Africa. In exchange for displaying an advertisement on your back window, and agreeing to drive a pre-determined amount of kilometres every month, Just Group Africa subsidises part of the monthly instalment you owe the bank. A video clip on their website explains:

[Just Group Africa advertisement] Let’s look at an example of this. If the price of your car was R100 000, and the advertised instalment R899 over 72 months, with the interest rate at 11,5%, and assuming that you drove the full 2000km, then your monthly instalment would be R1910, 80, and your subsidy R1011, 80.

Wesbank weekly auctions

Wesbank weekly auctions and vehicle catalogues are available across the country. All you have to do is know where to look. Your first point of call should be the Wesbank website which not only lists all the destinations where the auctions will be held, but a catalogue of all of the cars on auction in those places. It really is that simple.

The best thing about this website I feel is the fact that they understand that not all people attending the auctions are regulars and as a result need a helping hand in the way of what to expect. Therefore they have developed a manual explaining the process in detail for you. So here is breakdown for you to digest whilst thinking of your next car.

Decide what kind of vehicle you want before hand and set a budget

One vital word of advice that Wesbank provides to its customers is that they come in to the auction house with a predetermined budget. The whole experience of attending an auction can be very exciting and many people seem to get caught up in the process and forget all about their budgets. This is essential however to ensure that you do not purchase beyond your needs and you do not end up having your car repossessed as a result of late or no payment of monthly instalments.

Take a look at what is on auction

Wesbank weekly auctions and vehicle catalogues are readily available on their website as well as in traditional media publication such as newspapers. This means that you do not even have to enter the show house and look around for what is available. You can look from the comfort of your own home.

You cannot test drive the vehicle

Unlike dealerships, you cannot actually test drive a vehicle that has been placed on auction. This may put a lot of people off as they may feel that they are being ripped off if they do buy. However all cars at auction are started and left running during the auction in order to prove they do actually run. If this is not enough proof for you, all auction houses allow you the opportunity to bring in a qualified mechanic or auto electrician in order to inspect the vehicle before you bid. Auction houses generally have an open day the day before the auction for you to inspect the vehicles.

Do not set your heart on one car

Wesbank suggests that instead of putting all of your eggs in one basket, you choose a selection of cars that you are willing to buy. This way should you be outbid at auction, you can have cars to fall back on. This will also assist you in stopping yourself from spending outside of your price bracket.

Do your homework

Don’t come to an auction assuming that you are getting a good deal. Always compare the prices that you find at auction with others out there in the market. This isn’t to say that Wesbank will be ripping you off, but you may find something better somewhere else even if it isn’t an auction vehicle.

Not everyone can bid at auction

The majority of the auction houses require a registration fee of sorts. This ranges depending on the auction house but currently on the Wesbank website, they state that a R5000 registration fee is required before you can attend an auction. From here you will be registered through Wesbank and will be able to start searching through the catalogues on offer and attend the auctions where you have seen something that you like.

Standard Bank Reposessed Vehicles

Standard Bank repossessed cars are available to the public, to those people that are looking to own a car that is much cheaper than the market price. These cars can be bought privately or publicly at auctions houses located in Cape Town, Durban, Johannesburg and others regions around South Africa. When money runs out, people start struggling to hold on to their worthy possessions that have been financed by banks and vehicles are the ones at the top of the list. This is sad news, but where one person loses the next person gains and this is the best opportunity for someone to buy that repossessed vehicle at low cost.
There is a very significant increase in Standard Bank repossessed cars, and this is partly due to the ever increasing interest rates. In the end, many of those people that purchased their dream cars can no longer afford the payments and this leads to the banks repossessing the vehicles and selling the vehicles to the public for what is owed on the vehicle. There are more than 1200 vehicles repossessed a month in South Africa due to non payments.
There are many places you can visit in order to find out more about Standard Banks repo vehicles. You can also visit one of the branches in your area and speak to any one of the employees and ask them how you will be able to attend these auctions or find more about the private sales. Remember that you will only be paying what is still owed on the car, and this is the only thing the banks are concerned about. They do not what to make an extra penny. Make sure that you do your research properly so that you know exactly what you will get involved with when it comes to bank repo cars available at auctions.

Buying and financing a vehicle – Tips from Standard Bank

Buying and financing a vehicle is normally associated with unnecessary problems.
To help make the process easier, follow the steps below.

Step 1. How much can I afford to spend?
The first question you need to ask yourself is how much you can afford to spend. This is important, as you should not over-commit yourself.

Income – expenses = surplus

* When calculating how much you can afford, it is important to include the insurance premium, as all vehicles financed by us have to be comprehensively insured.

Step 2. Calculator
Once you’ve determined how much you can afford, you can use our calculator to determine the monthly repayments on your “dream” vehicle.

Step 3. Approved dealers
Once you know how much you can afford to spend on a vehicle, you will need to find one in your price range. It is preferred that you buy your vehicle from one of our approved dealers.
These dealers have agreements with us that protect you.

Step 4. Private sales
A “private” deal can be defined as “the sale of the goods not sold in the ordinary course of business by a dealer in those goods”.
We can finance private sales, however, the following conditions must be met:

  • The buyer or seller must either be a Standard Bank current account holder or vehicle and asset finance customer of good standing
  • Conclusive proof of ownership by the seller is required. This can be:
    • A settlement letter from the financial institution where the vehicle is currently financed together with a copy of the vehicle registration documents reflecting the seller as the registered owner.
    • A paid up letter from the financial institution that financed the vehicle confirming the full and final settlement amount, together with a copy of the vehicle registration documents reflecting the seller as the registered owner.
    • A certified copy of the initial invoice and receipt as well as a cancelled cheque and a bank statement as proof of full and final payment to the dealer, together with a copy of the vehicle registration documents reflecting the seller as the registered owner.
  • If we enter into a private deal with you there will be charges which will be explained to you by a consultant

In all of the above instances, we should be able to identify the vehicle by its engine, chassis and registration number.

Step 6. The financing process
Now that you have found your dream vehicle and the finance has been approved, the process is as follows:

  • You sign an offer to purchase the vehicle with the dealer; this will confirm you intend buying the vehicle.
  • The dealer will finalise the sale.
  • The dealer will draw up an invoice and, in accordance with the offer to purchase, list the vehicle’s details.
  • The dealer will then fax the invoice to us.
  • On receipt of the faxed invoice we will draw up the credit contract you will be required to sign.
  • The contract will be drawn up according to the information you provided to us.
  • When signing the contract you will be required to provide us with the following documents:
    • Valid driver’s licence
    • Proof of comprehensive Insurance
    • Proof of salary
    • A utility bill (a water, electricity or Telkom account) indicating your physical address.
    • A copy of your ID document
  • Once you have signed the credit contract, we will provide you with an Authority to Release form to give to the salesperson who sold you the vehicle. This is the final document that you will have to sign.
  • This document confirms that you have taken delivery of the vehicle and that we can pay the dealer.

The only time that you will not be required to hand over the Authority to Release form is if you do not take delivery of the vehicle

Standard Bank

Vehicle Finance Balloon Payment

Most of us don’t know the dangers of a balloon payment car loan and what we should be aware of prior to signing our loan papers and taking our new vehicle home.

What is a Balloon Car Loan?
First you need to understand exactly what a balloon loan is. Balloon auto loans are designed so that when the loan term, or length of the loan, is finished the car is not paid in full. Instead you make one last, large, balloon payment to complete the terms of your loan. Until this payment is made you vehicle is not paid in full. Balloon loans keep your monthly payments lower. In addition these payments are mostly for the interest. When your balloon payment comes due you are usually paying off the principal of the loan. So what are the dangers?

Keep Your Payments Low
A balloon loan is a good option if you absolutely need to keep your monthly payments low knowing that towards the end of the loan you will have the money to pay off the balance. Additionally balloon loans are an option for those people who absolutely need a new car but have no money for a down payment. Still you need to be sure that at the completion of your loan, 3 to 5 years from now, that you are driving a vehicle that is worth paying off. Paying R150, 000 for a vehicle you no longer want isn’t worth that amount can be difficult to deal with.

Plan in Advance
Aside from having a car you want to pay a large sum of money for you really need to plan for the balloon payment in advance. Saving monthly, or investing some money in order to make the balloon payment is extremely important. You also need to consider that refinancing a balloon loan can be difficult making your decision that much more important. It may be possible to extend the length of your balloon loan at the end of the term but it is not guaranteed. If you do refinance you could end up extending the amount of time you are paying on your new car from 3 to 5 years to possibly 5 to 7 years, or even longer.

Not having the money for your balloon payment at the end of the loan is really the worst-case scenario for the lender. If you miss your payment, cannot make arrangements, or cannot refinance you may lose the car even after you paid the interest for all those years. Even if you have the option to buy the car back you still have to come up with the principal to do so. Under a normal loan if you lost your car towards the end of the term you could buy it back for far less than you would if you had a balloon loan.

Dangers of a Balloon Car Loan

There are many concerns you should have about taking out a balloon payment car loan:

  • The first concern should be obvious, but many dismiss or overlook it. It is highly likely that you will not be in a better financial position in 3 to 5 years, as much as you hope or would like to think that you will be.
  • You need to carefully consider what you will do if you are unable to refinance your car at a better rate and with better terms. How will you pay that loan off? You will still be obligated for the balloon payment. Are you prepared to let the car go? What will you do for transportation? Not making that balloon payment will damage your credit score.
  • Another concern is that since you are paying only interest on the loan through the end of the loan period, you will likely owe more on the vehicle that it is worth. This will cause you great difficulty in selling for the amount you owe or refinancing the loan.
  • Before taking on a balloon loan for a car purchase, carefully consider the value of the car, the expected value in two or three years when the balloon car payment will be due, and how much you are willing to sacrifice to own the vehicle. In many cases, a balloon loan is not the right financing option, and simply allows you to incur more debt that you can really afford.

Benefits of a Balloon Car Loan

Here are some of the benefits of getting a Balloon Car Loan:

  • A balloon payment car loan buys time: The lower payments during the loan term allow for the borrower to collect the cash due to pay off the entire debt. Some scenarios include other investments that may mature during the loan term, or changes in income that will allow the borrower to pay off the entire debt.
  • A balloon payment car loan allows for a “sale option”: If the borrower holds the title in the interim, he or she has the option of selling off the vehicle and using the resulting cash to pay off the loan. It’s important to talk about this situation when taking out a balloon payment car loan, as liens or other types of restrictions may prevent or delay resale.
  • A balloon payment car loan is essentially “lump credit”: The lender carries much more of the deficit throughout the term of the auto loan, leaving more cash in the hands of the borrower.
  • A balloon payment car loan generally offers a lower chance of repossession: Because of the fact that the loan payments are smaller than they would be with a different type of loan, there is a lower chance that repossession agents will show up at the door looking to take a vehicle.
  • A balloon payment car loan generally offers fixed rates: For any unsecured car loan, the norm is for the loan to carry fixed rates of interest, so that the borrower knows what total amount they will eventually pay and does not have to worry about changes in the interest rate of the loan due to fluctuations in the market.
  • Whether the vehicle has an anti-theft system

Requirements for a Balloon Car Loan

There are two main requirements for getting a balloon car loan:

  1. In order to qualify for a balloon loan, you need to have a regular income – in other words, have proof that you are employed and can make payments on the car.
  2. You need to have a solid credit rating, although the exact number is flexible with some lenders.

How to Compare Balloon Car Loans

It is important to take the time to compare a balloon car loan against different loans. You do this to make sure you are getting the best deal possible. You are also working with your current financial means to help you get over some rough spots or finding the best deal for you overall. Taking the time to compare these types of car loans is very important, but knowing how to compare the balloon payment car loans is also important.

1. Understand the End Number

Every balloon payment car loan has a final number. This is the amount you will be making on your final payment. A balloon payment is a type of payment that keeps pushing off some of the amount until the end payment. You should understand what that number is going to be. There are two ways to do that:

  • Ask the lender what the rate of interest is going to be?
  • What type of loan is it? Are you going to pay more at the end or are you going to pay less?

2. Check out the Monthly Payment

Knowing you can afford the payment is also something you should know. During the course of the payment the amount you pay each month could rise making the last payment much larger at the end than when it started. Check this out by calculating the interest rate, and the total cost of what you are paying off.

3. Compare the Interest Rates

Knowing which interest rates you are going to be paying is crucial to the amount you are paying in the end. Compare rates and compare the rates of how the loans will increase, or decrease over time. Check each lender and ask for a detailed amortization (or amount of projected time it would take to pay off the debt) of the loan. This will show you exactly where you will stand each month.

  • First, you can have a low interest rate which will make for a low initial payment that will rise over time for a higher ending payment.
  • Second, you can do the opposite. You can start with a higher interest rate which gives you a larger initial payment, but decreases over time.

Balloon loans can be extremely beneficial to the right people but you should be aware of the dangers. More so than any other loan you need to have a plan to take care of the balloon payment ahead of time. With careful planning and proper research you may be able to avoid the dangers of a balloon loan.

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