Buying a car? Take a closer look at that contract
If you are thinking about buying a car, especially a used car, this story should motivate you to pay very close attention to the paper work.
Sithembile Lembethe’s experience in buying a Nissan NP200 bakkie from Renault Pinetown Multifranchise dealership at the end of June last year is an example of what can happen if you don’t assertively interrogate the contract put in front of you to sign.
The advertised cash price for the bakkie was R70,000. But when Lembethe signed the deal, financing it over five years, a whopping R30,000 in extras had been loaded on to it, among them a service plan and warranty totalling more than R13,000.
The bakkie’s service book was missing stamps for the past two services — 75,000km and 90,000km — meaning she had no hope of a successful claim on either. Six months later the bakkie lost power and wouldn’t restart.
It was towed to Nissan Pinetown where mechanics found the cambelt was loose and worn out; a component t h at should have been replaced at the 90,000km service.
She was told the repairs — cambelt, new battery and spark plugs were for her account. That’s when she turned to In Your Corner for help. A close look at the particulars of her deal made for chilling reading.
Lembethe and her husband had lost their son in a car accident the month before and she conceded she had not applied her mind to the car deal.
“The papers were drawn up with all the extras added and we just signed where we were told to.” She was told she would have to pay R3,000 for a tow bar. The bakkie didn’t have a tow bar.
Lembethe said she was told it was for reinforcement at the front of the vehicle, allowing it to be towed. When I asked Tammy Maddox, dealer principal of the Pinetown Multifranchise, who was not involved when the deal was concluded, she said that was a mistake, the R3,000 was for the bin lining.
Lembethe was charged an extra R3,000 for an old, pre-existing cover on the load area. How was that justified? Surely longstanding extras should not be added and should be included in the purchase price?
Maddox said: “My only explanation is that the sales executive broke the price down to highlight these extras on the car.”
With the extras added, the price of the bakkie was still in line with the market value, she said. Asked to comment, National Automobile Dealers’ Association director Gary McCraw said the “book” value of vehicles did take into account after-market products, such as bin linings and covers, which is why a dealer would itemise them separately.
As for the very worrying issue of the dealership selling Lembethe R13,000 worth of service and warranty plans that were, in effect, invalid because of the patchy service history, Maddox said: “The failure to check the service history does, indeed, also affect the policies.
“This lack of attention to detail essentially exposes the company not only to reputational damage but also to potential financial loss. In the interest of our customer, the company would have to honour the warranty.” Steps had been taken to avoid that happening again, Maddox said.
CONSUMER LESSON: Always check the service book — if there are missing stamps, do not proceed. Then there was a R4,500 “service and delivery” fee. What that really is, aside from the justified cost of licensing, registration, number plates and a tank of fuel, is an underhand way of bumping up the cost of the car, instead of building the costs into the cash price of the car.
Those actual costs don’t come close to R4,500. It’s a dealership’s responsibility to do these things before selling a used car.
McCraw said “on the road” c o st s vary from dealership to dealership, and covered the cost of “preparing the vehicle to be fit for the road”. Building those costs into the selling price would be a more transparent, consumer-friendly way to price cars.
CONSUMER LESSON: Refuse to pay the full “service and delivery” fee. Negotiate. Lembethe was charged R1,899 under “other extras”.
Turns out that was for windscreen protection, which she didn’t ask for, she said. And that included a hefty commission of R539, which she is paying interest on for five years.
A tracking device added another R3,613 to the deal, plus she’s paying R200 a month for the tracking service. On investigation, it seems she was arbitrarily given Matrix’s premium product, hence the upfront cost, plus that monthly tracking cost.
Lembethe is adamant she was not told about any cheaper options or that she could choose between a “cash” and a “budget” option. And the interest rate — she’s been saddled with prime plus 5 — 16.5%.
CONSUMER TIP: Letting the dealership spare you the hassle of fitting extras — some of which you may not need — and arranging your finance may seem quick and convenient, but it could cost you more.
Take charge and source your own finance deal — you are l i ke ly to get a lower interest rate if you qualify.
And if you are trading in or buying a car — or both — find out what the going values are from the same source the motor industry uses: Transunion’s Auto Guide. That way you know if the trade-in price is fair and you know what the car has been selling for around the country.
Go to www.carvalue.co.za — it costs R10 per report, but you get one free valuation on registering.
TOP THIS: Cream buns would sound a lot more appealing, but since supermarket bakeries use imitation cream these days, they ’re forced to use the term “dessert topping” instead, leading to the curiously named Dessert Topped Bun.