DIY vs Dealership – The best option for car finance in South Africa

When applying for finance on a new set of wheels you can either do it yourself or have the dealership facilitate the process on your behalf.

While there is no right or wrong choice between these options, each one has its distinct pros and cons you should be aware of before spending your hard-earned cash.

Head of Marketing and Communication at WesBank, Lebo Gaoaketse, delves into more detail on the main benefits and drawbacks between these two avenues of vehicle purchasing below.

Dealership deals

The biggest benefit derived from following the dealer application route is convenience, said WesBank.

In this scenario, all you have to do is provide the salesman with the necessary paperwork and proof of income, after which the dealer’s finance and insurance department takes care of all the administrative work that goes into setting up the finance contract.

They’ll approach various finance houses to seek the best deal, and even provide options for insurance cover.

“This hassle-free option is especially appealing for first-time car buyers who might find the application process intimidating,” said Gaoaketse.

DIY car finance

The direct approach to getting approved for a car loan lacks convenience in comparison to a dealership application, but it makes up for this by giving you full control over your deal structure.

By getting pre-approved for vehicle finance before approaching the seller, you will be less likely to fall prey to a smooth-talking salesman trying to get you into a vehicle that costs more than you can reasonably afford.

“Knowing your budget and sticking to it also empowers buyers to negotiate with the seller to price the desired vehicle within the approved loan amount,” said Gaoaketse.

The drawback of applying for finance yourself is that it may take longer than if a dealership were to handle it since you will have to approach the various credit providers individually and haggle for the best deals.

Prominent vehicle sellers who have already built up a good working relationship with a finance house may also be privy to better terms and conditions than you as an individual might be.