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Get smart on car payments or get ready for shocks

By Bidvest Bank

Its early days but individual car buyers show little sign they’re prepared for a rising interest rate environment and may be in for a repayment shock later in the year. The consumer alert has been sounded by the asset finance division of Bidvest Bank, a leading vehicle finance provider.

The division has developed what is believed to be the country’s most comprehensive digital toolkit for calculating tax, running cost and repayment impacts when buying a new car.

It can tell consumers the finance repayment levels over various periods at different interest rates; not only the current prime rate, but at higher rates should rates rise again – as some economists predict. 

Anyone with internet access can work out financial parameters by calling up this feature of the asset finance segment of the bank website at www.bidvestbank.co.za.

Tools cover:


·         perks tax implications

·         credit limits and the appropriate vehicle price range

·         monthly repayments, allowing for variables such as deposits and the term of the loan or lease deal

·         running costs


Byron Corcoran, head: fleet and asset finance at Bidvest Bank, points out: “We pride ourselves on our closeness to customers. We monitor consumer behaviour closely and we’ve seen no uptick in usage of our digital tools.

“This is not a problem as our staff are trained to cover all the variables and work out the optimum deal structure case by case.

“We regularly update the database to reflect changes to the petrol price and e-tolling. The data is an invaluable aid, especially when rates might be rising. The worry is that more customers don’t use the service.”


In most cases, customers do not gather financial data before walking on to a showroom floor and it is rare for a would-be buyer to calculate interest rate impacts above the current prime rate. Says Corcoran: “Our reading of the situation following the end-of-January rate hike is that car-buyers are more concerned about the weak rand.

“They expect rand weakness to drive up vehicle prices. It therefore makes sense to buy sooner rather than later.

“But it is also prudent to consider the interest rate climate.”

There is no “interest rate blind-spot” with corporate buyers, says Bidvest Bank’s asset finance specialist. He says they often develop their own databases, though they may cross-check their numbers against the bank’s calculations.

Corcoran is keen for individual buyers to be just as prudent. He adds: “We want happy customers; not only when the deal is done, but months and years down the line.

“It makes sense to check affordability against today’s rate and then perhaps add a percentage point or two to see what the repayments might be in future. Smart buyers not only want the right car, they want the right deal. That’s why they come to us.”