An explosive book has lifted the lid on the murky world of vehicle purchase costs and claims that buyers are being taken for a ride.
But the book, Eff You Very Much – How you are screwed by dealerships and banks when buying a car, has been dismissed by Nelson Mandela Bay vehicle dealerships as unfounded, with the authors accused of driving a personal agenda.
Written by Crystal Slabbert, 55, of Port Elizabeth, and John Titmus, 58, of Jeffreys Bay, the book, which hit the shops last month, is the first in a twopronged attack on the vehicle retail industry and banks, with the second being a class-action suit the couple have launched.
The book examines the added costs when buying a vehicle from some dealerships.
In many cases, buyers pay for the “free” key ring, carpets and champagne touted as gifts from salespeople. Buyers also pay for the petrol in the vehicle and its cleaning before being bought.
These costs are normally listed as on-the-road (OTRF), admin or agent fees.
“If you’ve bought a vehicle since 2007, you were probably ripped off,” Titmus said.
“The dealerships have been ignoring the Consumer Protection Act (CPA) as well as the National Credit Act (NCA).”
While a Weekend Post investigation showed a number of grey areas around the plethora of OTRF variations charged by dealers, it was clear that one controversial OTRF practice was commonplace across the vehicle finance industry.
Held up against the NCA, it seems to be illegal for dealerships and finance houses to add the OTRF – some of which are nearly R10 000 – to the credit agreement used to fund the purchase of a vehicle.
This practice, which is detailed extensively in the book, was the subject of a compliance notice issued to Volkswagen Financial Services (VFS) by the National Credit Regulator (NCR) late last year.
The notice stipulated that when included in credit agreements, OTRF, admin fees and credit handling fees were illegal, that affected consumers be refunded, and that a report be submitted to the NCR.
The compliance notice is under appeal, but if unsuccessful, VFS would have to cease these practices and refund affected car-buyers.
Slabbert – a former business owner who made headlines in 2015 after allegedly being subjected to sexual harassment at a Port Elizabeth dealership where she held a cleaning contract – and Titmus say OTRF are illegal if fees are charged for items other than the licence, registration, number plates and fuel.
In addition, the pair’s investigations – which were carried out at some of the Bay’s most popular and biggest dealerships – found that:
Some dealerships have been padding the costs on smash-and-grab film and paint protector;
There are massive differences in prices at dealerships on items such as number plates;
Some dealerships failed to disclose first date of vehicle registration, meaning car buyers have lost out on months of warranty and maintenance plans;
Buyers are sometimes sold warranties for used cars which automatically come with a sixmonth warranty; and
Some banks charge interest on their initiation fee and the ORTF.
“Car buyers need to be aware of all the hidden costs,” Titmus said.
“In the excitement, buyers are suddenly made to sign for these ‘hidden costs’, which in many cases total thousands in additional costs and in many cases constitute illegal fees.
“Since many buyers are unaware of the fees when they arrive to sign off agreements and collect their new vehicle, these fees are ultimately included in the credit agreement, which is illegal according to the NCA,” he said.“The book is engineered to make the consumer aware that the dealerships are charging for things that they are not allowed to by law.
“The idea of writing this book was not motivated by revenge but rather to expose and enlighten consumers.
“The public must get their money back from dealerships and from the banks.
“We intend to institute class action litigation on behalf of consumers via our lawyers.”
Andries Nel, 43, who is the first person to sign up for the class action, purchased a Volkswagen Polo from Tavcor last month for R209 000.
He said after getting the vehicle, he found its price had increased to R216 000.
“When I read this book, my eyes were opened. Consumers are being ripped off.
“This is the reason I joined the class action,” he said.
In one of the most startling comparisons in the book, and based on March 2018 figures for new vehicles obtained from local dealerships, a Volkswagen Polo Vivo Trend attracted OTRF of R9 203.
This was against OTRF of R6 000 for a Mercedes C200, R5 298 for a BMW 320i Sport, R5 520 for an Audi A4 and R4 500 for a Toyota Fortuner SUV, among comparisons.
But Bay dealerships named in the book have rubbished the claims, saying their fees, charges and financial processes are above board and backed by their related financial services providers.
VW Financial Services appealed the compliance notice issued by the NCR, in which it was instructed to stop charging all the fees and to refund consumers, in October.
Senior legal adviser at the NCR, Nthupang Magolego, said compliance notices were issued as a result of industrywide proactive compliancemonitoring exercises by the NCR that uncovered the fees.
This also included BMW Financial Services and Mercedes-Benz Financial Services.
The NCR instructed the vehicle financiers to stop charging all the fees and to refund consumers.
“The vehicle financiers objected to the compliance notices in the tribunal. The objections are pending before the tribunal.
“If the objections are rejected [by the tribunal] the vehicle financiers can appeal to the high court and ultimately to the Supreme Court of Appeal,” Magolego said.
“The NCR can do the same if the objections are upheld. These fees are not provided for in the National Credit Act and are [thus] unlawful.”
It is not yet clear when the tribunal will hand down its verdict.
Port Elizabeth attorney Mark Rossouw said he would be assisting with the class action.
The book has also been endorsed by Duon Odendaal, professional arbitrator and mediator at South African Consumer Complaints.
He said its content was factually correct. “It is of great value as it will allow consumers to understand the pitfalls when financing vehicles and other assets where suppliers inflate the contracts with extras,” he said.