Car dealers still charging ‘on-road’ fee

When the National Credit Regulator announced recently that it was unlawful for an “on-the-road fee” to be included in vehicle finance contracts‚ and ordered BMW Finance and VW Financial Services to stop doing so and refund those who had been charged it‚ motorists across the land rejoiced.

But it appears to be business as usual at dealerships, with extras such as pre-delivery checks‚ valets and admin fees still added to finance agreements‚ while both BMW and VW have objected to the so-called compliance notices served on them.

“[We] will continue to conduct industry-wide investigations to root out illegal charges and fees that consumers are charged‚” the regulator said in October.

But the various banks’ representatives – many of them based in dealerships – are still adding the “forbidden” fee to the contract; usually between R4 000 and R5 000 on cars with a purchase price of under R200 000 and more for the higher-end cars.

Finance agreements may include an initiation fee‚ an extended warranty‚ the cost of delivery – if the buyers do not collect the cars themselves – plus a tank of fuel and licence or registration fees‚ provided those costs are not padded.

But the National Credit Act does not allow for the other extras.

Asked to comment‚ a National Credit Regulator spokesman said: “We cannot comment on the specific examples in your e-mail since the merits of our compliance notices are now before the National Consumer Tribunal for adjudication.”

VW Financial Services’ standard response is: “[We] hold a different view on the legal interpretation of the applicable provisions in the National Credit Act.”

If the fee was added to your credit agreement‚ with whatever bank‚ the regulator wants to hear from you – e-mail Attach your credit agreement as evidence.

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