On-the-road fees, Black Friday 'bargains' and third-party crash claims

In this weekly segment of bite-sized chunks of useful information, consumer journalist Wendy Knowler summarises news you can use:

About that on-the-road fee

It’s been three years since the National Consumer Tribunal ruled that the National Credit Regulator (NCR) was correct in finding VW Financial Services (and by implication all other vehicle finance houses) was wrong to add an “on-the-road” fee to its contracts. But that ruling was appealed, so the dealerships and the banks which finance those deals have continued to charge the fees.

Last month the matter — NCR vs the local finance arms of three German car brands — was heard in the Pretoria high court, but judgment is only expected to be handed down in the new year. So that fee is still being added to car finance contracts across the board.

The National Credit Act (NCA) prohibits anything extra being added to the contract other than a tank of fuel, number plates and licence and registration fees, including a “justifiable” fee to cover the dealership’s staff sparing the buyer a long licensing queue.

So no “admin” fees, car-checking fee, washing-the-car fee or other padding which dealerships see fit to add to financed deals instead of building them into the advertised cost of the car.

As I’ve been saying for years, the issue is not that dealerships are passing on their costs to their customers, it’s that those costs ought to be included in the purchase price, not slapped on as an extra at offer-to-purchase stage.

Worse, they are not transparent about it. They almost never break down that “delivery” fee on the documentation — consumers only get full disclosure, well, disclosure of sorts, if they ask for it.

This week a man who works for a fairly large motor dealership group emailed me about what he termed “the excessive fees”.

“An investigation should be carried out,” he said.

“We are made to add an ‘admin' fee of R4,600, a service and delivery fee of R4,600 plus VAT, and a licence fee of R2,000 on top of that. Smash-and-grab safety film is also being added, as compulsory, at a price of R5,000 plus VAT. If the vehicle has the safety film already fitted we are still required to charge the customer.”

Outrageous. All I can say is, be aware of these tactics and push back on those fees. Hard. And let’s hope the judgment turns out to be consumer-friendly.

Know this before you pursue a third-party car accident claim

I totally get why people who’ve been involved in a “not my fault” accident are reluctant to claim on their own insurance policy. Why should they have to pay the excess, lose their no-claim bonus and possibly have their premium increased as a result of the claim?

But third-party claims are notoriously tricky, as Jacqueline discovered earlier this year.

In March she was driving in Sea Point, Cape Town, in the rain, when an Uber motorcyclist travelling from the opposite direction lost control of the bike which slid across the road and smashed into her car.

“The driver was thankfully not injured but both our vehicles were damaged,” she told me.

Jacqueline swapped details with the driver and later submitted a third-party claim to his insurance company.

“The accident was not caused by me and therefore I am not claiming through my insurance,” she said. But her claim was rejected on the grounds that the motorcycle driver was not negligent.

“My car will cost R4,500 to repair and neither the other driver nor his insurer are taking any responsibility,” she said.

It’s too late for her to claim for that incident on her own policy.

“I don’t understand why my vehicle cannot be covered by their insurance as their client caused the damage to my vehicle,” she said. “Negligence or no negligence — he caused damage to my vehicle and they should pay.”

Unfortunately, it’s true that as a third-party claimant you must prove negligence or recklessness on the part of the insured party, such as driving while on the phone, an unlawful speed or failing to stop at a traffic light.

It may feel unfair, but if you have your own motor insurance policy and you’re involved in an accident you don’t believe was your fault, you’d be much better off claiming on your own policy. It will be settled relatively quickly, and in full, whereas a third-party claim usually takes longer to settle and you’ll invariably be paid out less to account for your “failing to keep a proper lookout”.

How not to do Black Friday

Every year around this time, the NCR is at pains to urge consumers not to be swept up in the Black Friday FOMO frenzy.

“It’s very important for consumers to avoid the hype generated around Black Friday — not every item on sale is a Black Friday bargain,” said NCR education and communication manager Poppy Kweyama.

The way to know if that “40% off” price is a true bargain is to track the prices across competing retailers throughout the year — many have been caught out raising prices a month or two before Black Friday and then reducing them for the Black Friday bonanza and labelling them huge savings.

So if you must partake, know exactly what you want to buy and what the “normal” prices are so that you can’t be duped by bargains which actually aren’t.

Treating the spend-fest as retail therapy is especially foolhardy if you haven’t saved in advance and don’t have cash for your splurging, Kweyama said.

“If one takes into account the interest and fees on the credit, it makes the purchase more expensive — so you are not actually saving any money.”

And if you can’t meet your repayments on all your credit purchases in the new year, that Black Friday spend could end up as a “blacklisting” on your credit record. 

That can cost you in all sorts of nasty ways.

• GET IN TOUCH: You can contact Wendy Knowler for advice with your consumer issues via e-mail: consumer@knowler.co.za or on Twitter: @wendyknowler.

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