When buying a car you’ll often see that the price you’re paying is several thousand rands higher than the numbers that stood on the window.
This is because there are various costs associated with the transaction that retailers do not include in the advertising price so as to make the vehicle look more attractive to passersby, such as licence and registration fees and third-party warranties.
These costs can put a car just out of reach depending on how tight your budget may be, however, they are necessary to pay should you want to be on the roads legally.
As such, it’s important to consider such fees before signing a financially binding contract.
Doing your due diligence
First and foremost, licence and registration fees are inescapable if you’re buying a car from a dealership.
These are necessary for legal road use and depend on the type of car, the area where you live, and how much the seller adds on top.
On that note, some dealers will charge separate “admin fees” for doing the licence and registration on your behalf, whilst others will bundle it all into one single payment.
Say you live in the Western Cape, the price for registering a motor vehicle yourself is R282 and for licensing one with a tare weight of between 1,001kg and 1,250kg is R462 – amounting to a combined R744.
When purchasing a set of wheels at WeBuyCars, for example, the licence and registration fees (excluding VAT) are listed at R2,350 for any car with a tare weight under 3,500kg.
A so-called “service and delivery” or “on-the-road” fee can also be levied.
According to Cartrack, this involves several expenses that are necessary for getting a vehicle ready for ownership, such as:
- FSB fees
- Initial fuel
- Delivery fuel
- Cleaning or valet costs
- Certificate of Roadworthiness
- Pre-delivery inspection/safety check
-
Hire Purchase Investigation Clearance
While the prices of these services vary, they can go as high as R4,000 and will likely affect your ownership costs.
If a salesperson is really desperate for a sale, a smooth talker might be able to convince them to waive a few of these fees, but more often than not, you’ll have to pay them.
Most dealers also quietly throw in what they like to call “value-adds” hoping you will sign the contract before noticing these often unnecessary expenses, and then it’s too late to back out.
These can include anything from anti-theft window film and dashcams, to third-party warranties and service plans.
Unlike licence and registration fees, these costs are usually not required for your car to be legal and you can request to remove them.
They can also tally up to substantial amounts, sometimes tens of thousands.
Beware, the salesman will try to play this off by saying you’ll pay for them over the course of the credit contract and will barely notice the few extra hundred rands per month tacked onto your finance instalment.
Of course, you’re free to accept these value-adds if you believe they will, in fact, add value to your ownership experience and that you’ll be able to afford them.
Just don’t put pen to paper until you know how much they’ll cost and what the terms and conditions are – especially when it comes to non-manufacturer warranties, service/maintenance plans, scratch-and-dent coverage, and the like.
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