'Car a R700,000 mistake'
Ensure you understand the car financing deal you are negotiating - before you sign
UNSCRUPULOUS car dealers will never run out of ideas about how to take car buyers for a ride.
They don't care whether you are a first-time buyer or not, and they have no regard for the Consumer Protection Act.
Sadly, some banks allow their clients to be abused and exploited by car dealers when they should intervene in their best interests.
Take the case of Jamela Mabasa, of Wet Acres in Nelspruit who is battling to get Produkta Nissan, in Nelspruit, to reverse an amount of R75,000 they charged her for extras, she claims they did not fit to her car.
She claims she is also sitting with a huge debt on her new car and that an amount of a vehicle she had traded in had not been offset on the bank statement.
Mabasa's finance house, Standard Bank, says she signed the release note indicating she was happy with the vehicle, though the client claims she was not aware at the time of signing the contract, she had been billed for extras not fitted to her vehicle.
Mabasa decided in June to trade in her Mercedes Benz for a Nissan X-Trail, which the dealer was selling for R254,000, excluding hire purchase costs.
The single mother of two says she was experiencing financial difficulties when she decided to downgrade from a Mercedes Benz to an X-Trail.
"But it turned out my exercise was futile because I now owe the bank almost a million rands and paying the same instalment I was trying to reduce," Mabasa says.
Mabasa says she told the Produkta salesperson she wanted to trade her car in so she could buy a car with a lower instalment than the R6,200 she was paying monthly on her Mercedes Benz. She says the salesperson undertook to settle her balance of R218,000 owing on her Mercedes.
But she now in fact owes her bank R700,000. This consists of the purchase amount, unidentified extras worth R75,000, a balloon repayment of R110,000, total interest charges of R181,874 over the agreed term, and a VAT amount of R46,380.
"It's like jumping from the frying pan into the fire and my bank does not want to listen to my problem, Mabasa says.
Her contract does not reflect that she had traded in her car - nor does it show its value.
Mabasa only noticed this when her finance house debited her account at the end of July.
"I trusted the salesman and I never thought he would bury me alive, all I wanted was to downgrade," Mabasa said with tears welling up in her eyes.
She later left the car at the dealer's premises with a letter cancelling her contract, but the dealer has refused to release her from this costly sale, she says.
Kershia Singh of Standard Bank said Mabasa signed a release note indicating that she was happy with the new vehicle and they paid the dealer on her instruction.
"At this point, from a Standard Bank perspective, we have taken the vehicle to protect it and avoid it being driven anywhere."
She said Mabasa had abandoned her vehicle in breach of her agreement. Gerrie Cronje, the principal dealer refused to inform Sowetan the exact nature of the extras he says were in fact fitted to Mabasa's new vehicle.
He would not confirm the trade-in value of her Mercedes Benz, but was quick to add that he had settled his debt at his expense without revealing the amount he paid.
"We were asked by Mabasa to trade in her previous vehicle and to settle the outstanding balance.
"Mabasa applied for finance with Standard Bank to enable her to purchase the new vehicle and to assist her in funding the shortfall on her settlement," said Cronje.
He said she signed all the necessary documents including the invoice that reflected paint options and other accessories, which he claimed were fitted to the vehicle.
He said Mabasa was also given a discount on the X-Trail, because it was not new at the time of sale, with the car reflecting a mileage of 8,773km at the time of sale.
"Regarding the amounts reflected on the Standard Bank statement, please contact Standard Bank," Cronje said.