Vehicle Finance – The Finance Process

In our last article we examined some how to evaluate whether or not you could afford to finance a vehicle as well as a couple of finance options available to the South African public. In this article we’ll examine what you’re going to need to actually apply for finance in the country.

Yes, you guessed it, in this article we’re going to have a look at what documentation and the process you’ll need to follow to get your vehicle financed.

How does financing work

The first thing that happens when you’re financing a motor vehicle is that you’ll be asked to sign an offer to purchase a vehicle. This allows the car dealer to finalise the sale and draw up an invoice for the sale.

The dealer should list the vehicle’s details on the invoice in accordance with your offer to purchase. Once this step has been completed the dealer then typically faxes the order to purchase to the organisation who will finance the car.

Once the organisation has received the invoice they’ll draft a credit agreement which you will be required to sign. The agreement should outline your monthly repayments, the amount of interest you’ll be paying, as well as clearly outlining any penalties which may be incurred for late payments.

The contract will be drawn up in accordance with the information you provided the financing institution with. Whatever you do, don’t fabricate any of the information on the application form if you do you’ll be breaking the law and may be looking at some serious repercussions.

Once you’ve signed the contract you’ll need to provide the organisation financing your vehicle with the following documentation:

A valid driver’s license – yes, if you’re buying a car you will need to prove that you are legally allowed to drive it
Proof of salary – what you’ll need here is payslips. You may also be required to prove that you have worked with your employer for a period of at least six months
A utility bill – this could be anything from an electricity bill from Eskom to a telephone bill from Telkom – what the financer is actually looking for is proof of residence
Your ID document and a certified copy of it. Believe it or not, there are people out there who attempt to finance vehicles using fake credentials. Your financier will need to confirm that you are who you say you are.
Okay, so once you’ve supplied all of the required documentation you’re almost ready to finalise your purchase.

Your financier will provide you with an authority to release form to pass on to the person/dealer who sold you the vehicle. You’ll need to sign the document, which confirms that you have taken delivery of the vehicle, so that your financier can pay the dealer.

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