Algoa Nissan Humansdorp

The NCA was passed mainly to protect the consumer

Consumers Include:

1. Natural person (individuals)
   
2. Certain juristic persons (Legal Entity)

The NCA was passed mainly to protect the consumer Consumers Include: Natural person (individuals) Certain juristic persons (Legal Entity)

Type of Person Applying for Finance	Does the NCA Apply?
Individual (the customer)	Yes, unless the person is entering into a true rental agreement
Sole proprietor (self-employed person)	Yes, unless the person is entering into a true rental agreement
A trust with less than 3 trustees	Yes, unless one of the trustees is itself a juristic person, in which case it must be dealt with in the same vein as a trust with 3 or more trustees
A trust with 3 or more trustees with an asset value or annual turnover of less the R1 000 000	Yes, unless the trust is entering into a large agreement or a true rental agreement. Certain of the provisions of the NCA do not apply to juristic persons
Small juristic person (annual turnover or asset value of less the R1 000 000)	Yes, unless the juristic person is entering into a large agreement or a true rental agreement. (Note that certain of the provisions of the act do not apply to juristic persons)
Large juristic person	No
Government	No

With the advent of the NCA, any private person can now enter into an asset-based credit agreement (an instalment sale) for an unrestricted period, with no deposit and with a balloon payment. Such a person can also enter into a lease agreement.

However, it must be borne in mind that credit providers will implement a policy internally with regard to the agreement period and balloon, in an effort to protect the consumer.

To balance the extended finance-period benefit that private leasing brings against the reckless-lending risk, credit providers may insist on a deposit. They will base this on your personal credit rating.

1. A small agreement is one with a principle debt of less than R15, 000.
   
2. An intermediate agreement is one with a principle debt of between R15, 001 and R249, 999.
   
3. A large agreement is one with a principle debt in excess of R250, 000.
   

From 1 June 2007, all credit agreements that are subject to the NCA must be NCA compliant. For consumers who are not subject to the NCA, the terms of the sale, lease or rental agreement will be governed the Credit Agreements Act and the common law. (Examples of consumers outside the NCA are large juristic persons – i.e. juristic persons that have an asset value or turnover in excess of R1000 000 a year).

There are leases, instalment agreements and rental agreements in the asset-based forum.

Everyone has a right to apply for credit. This does not mean that the credit provider has to grant it: it first has to assess your credit rating. It may turn down your credit application on a number of grounds, such as lack of affordability and prior judgments. If your credit application is declined, you have the right to request the reasons. If the application was declined on the basis of an adverse report from a credit bureau, you have the right to be advised of this and to receive the credit bureau details. You have a right under the NCA to take the listing up with the credit bureau, to challenge the listing, and to have erroneous entries corrected.

You can only buy a vehicle if you have a valid South African driver’s license. It is illegal and very risky to drive without a valid license. Any insurance you thought you had will also be invalid – the insurer will refuse to pay any claims because you were driving without a license.

The NCA allows credit providers to insist that the consumer must, as an absolute minimum, have credit insurance. This is insurance that protects the debt in the event of the motor vehicle being lost, damaged or stolen. The insurance is limited to the amount outstanding under the credit agreement as it is from time to time.

Consumers are strongly advised to consider maintaining their own comprehensive insurance as an alternative, as this is linked to the market value of the asset. Credit providers may also insist on the consumer having credit life insurance. This is insurance that protects the debt in the event of the consumer’s death, disability or retrenchment.

The amount of credit that you can obtain depends on your income and your expenditure. A cornerstone of the NCA is the prevention of reckless credit and over-indebtedness, so credit providers will very carefully assess what you, the consumer, can afford, to ensure you are protected from taking on too much debt. If you apply for credit that you cannot afford, your application will be rejected.

When credit providers assess a credit application they look at factors such as your credit rating, your monthly income, your expenses, the length of the agreement period, the repayment rate, the residual or balloon payment, and the deposit you may pay. Each of these factors influences the amount of credit for which you will qualify.

In this case, you have a right to request the reasons for the declination. The credit provider will provide reasons upon your request to enable you to correct the problem.

You can buy any vehicle in good condition, whether it is new or used, but you must buy it from a supplier that is authorized (or approved) by the bank.

The NCA specifies the maximum interest rate that you can be charged. Within this boundary, the Bank will determine the interest rate by assessing your credit rating and credit history (the status of your finances – how much debt you have).

Apart from the principle debt, you will be charged:

An initiation or processing fee – a once-off fee payable in cash or as part of the principle debt (whereupon interest will be charged)

A service fee - as determined by your credit provider

Costs of optional extras – for example, the cost of an extended warranty; delivery of the vehicle; extras like a radio and air-conditioning; your first tank of petrol; credit life or credit insurance premiums; default administration costs and collection charges; and interest.

The NCA allows you to enter into a credit agreement without paying a deposit. To protect the consumer and its own risk, however, credit providers may implement policies that allow them to ask for a deposit if your personal credit profile (i.e. the state of your personal finances) justifies this.

Here is a list of the documents you must bring with you. The documents need to be originals, or certified as originals.

1. Your identity document
   
2. Your driver’s license
   
3. Your salary advice slip
   
4. A water and lights bill or telephone bill (i.e. a utility bill). It must not be older than three months
   

Only husband and wife. Main applicant must pass income affordability but can share expenses.

The vehicle has to be registered in the name of the person who applies for finance (called ‘the owner’) and in the name of the credit provider (called ‘the title-holder’).

Exceptions may sometimes be made in agreement with the bank.

You may negotiate this with the bank. Normally you would pay a deposit on signing the agreement (if a deposit is required). The next payment would be within 45-60 days of the signing of the agreement.

(This is the date on which you must make a payment every month) Yes - you can call the bank and ask for a date change. Your telephone call will be recorded and you will receive a copy of your request in writing within 20 business days.

In the case of an instalment sale, YES - ownership passes to you automatically at the end of the agreement once you have paid all amounts you owe.

In the case of a lease, YES - ownership passes to you if you pay the nominal amount and meet the other conditions set out in the lease agreement.

In the case of a rental agreement, NO – you must return the vehicle to the credit provider at the end of the agreement.

Yes, provided all parties (the bank, the motor dealer, the insurance company and you) agree to substitute the vehicle, and provided the vehicle is credit insured; failing which you are responsible.

Contact the bank as soon as possible and tell us about your problems. If we cannot help you to resolve your problem by agreeing to a repayment arrangement, you have the right to go to a debt counsellor.

Yes -if you no longer want the vehicle for any reason (be it financial difficulty or otherwise) you may hand it back to your credit provider at any time. Your credit provider will value the vehicle and tell you what the valuation is. If you are not in arrears, you may then change your mind and re-take possession of the vehicle.

If you are in arrears, the consequence is that you must pay these arrears before re-taking possession of the vehicle. Otherwise, your credit provider will sell the vehicle. If the sale of the vehicle does not achieve enough money to settle your account, you will have to pay your credit provider the shortfall, failing which your credit provider could take a judgement against you. This could negatively affect your credit rating. Can I pay off my agreement (settle) earlier than planned?

Yes -you may settle your agreement early at any time. If your agreement had a principle debt of less than R249, 999.99 when you entered into it, you may pay your credit provider the outstanding capital, plus any arrear interest and outstanding costs. If your agreement had a principle debt of R250, 000.00 or more, you can give your credit provider 90 days’ notice in lieu of a settlement charge.

Yes – only if you signed the credit agreement off the registered business premises of your credit provider. In this case you have 5 days (the ‘cooling-off period’) to return the vehicle. You will be charged for the use of the vehicle during the cooling-off period.

(Motor dealer and credit provider premises are seen as registered business premises. As such, the 5-day cooling-off period will not apply.)

Yes - you will pay less interest overall. (Note that you can’t take back the extra payment later.)

Absolutely. The NCA is very specific about the protection of your personal information. Only you can give permission for the distribution of your details to other people.

No - you may not sign any document that takes away your rights, or any documentation that is incomplete or blank.

Credit agreements (in relation to asset sales) When the Bank enters into a credit agreement with you, we place an asset in your possession. You either buy the asset by paying it off, or you lease it and pay monthly for the lease. In both cases you also pay interest or a fee. Examples of these agreements are instalment sale and lease agreements.

Credit provider The credit provider is the party that places the asset in your possession. Credit providers include banks and asset financiers.

Credit rating or credit worthiness This is a reference to the state of your credit and your credit history. The way you conduct your account can positively or negatively affect your credit rating at the credit bureau.

Guarantor / surety The surety is the person who undertakes to step into your shoes and repay your debt to the credit provider if you cannot do so. In other words, this is the person that stands surety for you. These surety agreements are also subject to the NCA.

Owner An owner is a person who has the beneficial use of an asset, but does not have the right to sell or transfer ownership until the finance agreement has been fully repaid. (Until such time, the titleholder has full rights to the vehicle – see definition below.) As a consumer buying a vehicle on an asset-based finance agreement, you become registered at the licensing department as the owner of the vehicle.

Title-holder The title-holder (also known as the credit provider) has full rights to the vehicle until the consumer (or owner) has paid all the outstanding instalments.

Residual / Residual Value A residual is a finance option applicable to rental agreements only. It is designed to make your monthly instalments more affordable, and refers to a lump-sum amount due at the end of the contract. As the credit provider carries the risk for this amount, in the case of motor vehicles your mileage (usage) will be specified to a maximum limit over the term of the agreement. The residual value is the credit provider’s estimate of what the vehicle should be worth at the end of the contract period.

If you took a residual and are now returning the vehicle to the credit provider, any costs for restoring the vehicle to good condition will be payable by you.

Balloon / Balloon Payment This is similar to a residual. A balloon payment reduces your monthly repayment and makes the vehicle more affordable. At the end of the agreement period, you are required to pay a lump sum to the bank. This lump sum is called the balloon. Paying the balloon amount to the bank is entirely your responsibility. You need to be certain that you will be able to sell the vehicle or trade it in at the end of the period to make up this payment. You could also ask the bank to re-finance the outstanding amount (balloon) - i.e. you could apply to borrow more money from the bank.

Juristic person A juristic person is an entity created by people. It is not a natural person. Examples for the purpose of the NCA are close corporations, companies, trusts with more than 3 trustees (or with less than 3 trustees if one of them is a juristic person), partnerships, clubs and any association of persons, whether formalised into a formal juristic entity or not.

Due date This is the date on which you elect to make your monthly payment to The Bank under the credit agreement.

Being in arrears A consumer goes into arrears when he or she misses a payment that is due and owing. The missed payments are called arrears. Arrears will attract additional interest and can have a negative impact on the consumer’s payment record at the credit bureau. This in turn will negatively affect the consumer’s credit rating.

Principle debt The principal debt is the amount that is deferred under the credit agreement. That principal debt is used to calculate the interest.

Initiation fee or processing fee This is a fee that the credit provider may charge the consumer for setting up and later concluding the credit agreement. Consumers must be given the option of paying this fee up-front in cash, or adding it to the principle debt, in which case it will attract interest.

Service fee As it pertains to asset-based agreements, this is a fee that is chargeable on a monthly or annual basis for the routine administration of the account.

Interest and interest rate Interest is a charge added to the principle debt and payable by the consumer. It is determined according to a rate such as a prime rate. Interest rates can be fixed or linked. If the rate is fixed, the instalments under the agreement will not vary. A linked rate agreement on the other hand, is linked to the reference rate. This means the instalments can increase or decrease as the prime rate or reference rate moves.