Buying a car is an exciting experience and should stay that way. The anxiety that comes with having to go through lots of paperwork can leave you slightly unmotivated and overwhelmed, making you want to just sign and get it over with. However, that may not be the best decision as you might end up signing documents that will later have you regretting and probably paying more than you should. In this article, we will take a look at what to expect when buying a car for the first time, the rules and regulations that exist in South Africa and how you can better prepare yourself for your first vehicle agreement.

First, there’s no such thing as a stupid question 

When you arrive at the dealership to finalise the car deal, you’ll be guided through the process by the dealership’s appointed Finance and Insurance (F&I) representative. F&Is are registered with the National Credit Regulator and are bound to give you sound financial advice based on your circumstances. As such, if you have any questions about your finances or the deal at hand, this is the last and perfect time to ask them. The F&I will have a checklist of important points that you have to completely understand before signing your contract and taking delivery of your new car.

If you don’t understand anything, then you can ask for clarification and simpler explanations. Don’t rush the signing process. Rather make sure you understand everything so that you don’t get surprises and expenses down the line.

While in this process, it is important to familiarise yourself with finance too. In the process of arranging your contract, you’ll be given the option to choose a fixed or linked interest rate. Know the difference and how this will affect your budget in the short and long term.

A fixed interest rate on your loan will be higher at first, but it will also remain the same for the duration of the loan. Conversely, a linked interest rate will be lower at first and save you money. However, it fluctuates with the interest rate changes as per the Reserve Bank and will therefore increase your instalments when the interest rate goes up and reduce your instalment when the interest rate decreases.

Financing your car 

By now, you must understand that owning a car means having to regularly finance it to keep it working and running smoothly. While some people opt to save up and pay a large deposit so that their monthly premiums are lower, making it easy to have money to maintain their cars, that is not always the case for some people. However, with graduate finance, you can rest assured knowing that you have chosen financing options that fit your pocket and your monthly premiums will not break your bank. So, consider signing up for vehicle finance so you can be sure of what you can and cannot afford.

Be careful of add-ons

  Some lenders might include other products in the loan agreement that you didn’t ask for, such as extended warranties or gap insurance. Or dealers may install extra equipment on the car that isn’t disclosed — such as customised wheels, running boards or anti-theft devices.

Basically, they hope you sign the contract without spotting the addition, and you are then committed to a higher monthly payment. Once buyers get the contract and are hit with the extra cost, many just sign it because they think it’s too late to back out. But know that you can require the dealer to remove the extras and correct the contract.

Don’t let vehicle defects affect you 

According to the Ombudsman for Banking Services, when you purchase a vehicle from a dealer, the bank or financial institution does not inspect it in any way. They merely rely on the information you provide in your application for finance. Contractually the bank or financial institution regards the vehicle as security for the loan. In other words, an asset that it can attach and sell should you default on the loan. They are therefore not responsible for any defects in the vehicle you have purchased. You will have to approach the dealer if you encounter any problems with the vehicle.

However, you can lodge complaints against a car dealer with the Motor Industry Ombudsman:

Telephone: 012 841 2945 E-mail: mi.ombudsman@netactive.co.za Fax number: +27 12 841-2842 Postal address: Suite 156, Private Bag X025, Lynnwood Ridge, 0040

  The National Credit Act does allow for the cancellation of a credit finance agreement within 5 business days after it has been signed (Section 121). This cancellation right is, however, only applicable in very limited circumstances, and there is a specific process that must be followed. The clause is generally only applicable if the finance contract was concluded and signed at your home or workplace, for example. The purpose of the cancellation clause is to provide for circumstances where salespeople sell goods to consumers and induce them to conclude credit finance agreements rather than pay in cash. The clause is generally not applicable to a vehicle finance agreement signed at a dealership or the bank. Most vehicle dealerships are registered as business premises by the bank, and most finance contracts are signed at the dealership. Therefore, this clause is generally not applicable to most vehicle finance contracts signed. You can obtain more information in this regard from your legal adviser.

Get help from your community

  If you have friends or family members that have cars and have entered into vehicle agreements, it is wise to ask them for any pointers to look out for in your contract. You can also have them help you analyse and understand your contract and agreement so they can warn you if any terms and conditions of your agreement are irregular or need to be addressed with your dealer or financial institution. WesBank offers not only financial assistance, but you will get ample advice, tips and tricks, and help regarding your contract, so do make use of their representative.

Last but not least, enjoy your car 

This is an exciting time for you as a first-time car buyer, and the one thing you want to do most is enjoy having your car. Once you have understood what costs come with it, decided on whether you are getting add-ons and more, you should insure your car so that you don’t have to worry about paying for unexpected expenses. Our pro-tip is always to consider insuring your car with your other assets under one profile so you can lower and manage your premiums. Once everything is sorted, you are ready to get on the road and wave that public transport life goodbye.

Good luck with your first car purchase. You got this!