What do I need if I want to cross the South African border with my MFC financed vehicle?
Does MFC finance pre-owned vehicles?
Do I need a deposit?
Why do I need vehicle insurance?
What is the difference between a linked interest rate and a fixed interest rate?
What is a loan term?
What is a balloon payment?
What are the different options available at the end of a lease agreement?
If I have a car allowance does that mean I pay less income tax?
What is the National Credit Act (NCA)?
How does the National Credit Act affect me?
Which credit providers and agreements are regulated by the NCA?
What do I need if I want to cross the South African border with my MFC financed vehicle?
Many people do not know this, but if you are planning a trip across the South African border with your financed vehicle, then you will need a Border letter from MFC.
In order to apply for a border letter, you will need to supply us with the following:
- A letter requesting permission to take your vehicle across the border. Please clearly state dates and destination of your trip.
- Confirmation from your insurance company that the vehicle is insured for the duration of the trip
- Your contact details while on your trip
- A copy of the Driver's License and ID document.
Once you have the above documentation please contact the call centre on 0860 879 900 and we will issue a Border Letter.
Does MFC finance pre-owned vehicles?
MFC finances both new and pre-owned cars. Please remember, however, that the age of the vehicle is a deciding factor in whether or not MFC will grant you finance.
Do I need a deposit?
Any private person or juristic person can enter into an agreement without a deposit. However, it is within MFC’s discretion to request a deposit.
Why do I need vehicle insurance?
Ownership of the vehicle resides with MFC until it is fully paid, which means that you are contractually obliged to comprehensively insure the vehicle for the duration of the contract. You can arrange your own insurance or request MFC and/or the dealership to provide a competitive quote.
What is the difference between a linked interest rate and a fixed interest rate?
When financing your vehicle, you have the option of having either a linked (variable) interest rate, or a fixed interest rate. A linked interest rate is linked to the Prime lending rate, and therefore the monthly instalment could vary during the loan term. A fixed interest rate (usually higher than a linked interest rate) means that the monthly instalment remains unchanged for the duration of the agreement.
What is a loan term?
The loan term refers to the actual duration of the finance agreement.
What is a balloon payment?
This mechanism enables you to pay a reduced monthly instalment. It means that you can defer a percentage of the purchase price until the end of an Instalment sale or Lease agreement. This may improve your monthly cash flow, but the full amount is still payable over the period (including interest on the balloon payment).
What are the different options available at the end of a lease agreement?
If you opt for a Lease agreement, you have the following options at the end of the contract:
- the vehicle can be handed back to MFC
- if you want to retain ownership, MFC will donate the vehicle to you at a null value
- if there is a residual value outstanding, however, you will have to first pay the residual value before ownership can be transferred.
- should you want to, you can refinance the residual value under a new agreement.
Note: There may be tax implications at transfer of ownership at the end of the contract, depending on your personal tax situation (especially when residual value is lower than market value).
If I have a car allowance does that mean I pay less income tax?
If you receive a car allowance, you are allowed certain tax deductions. However, the Receiver of Revenue requires proof that the amount received in a car allowance is utilised primarily for business use. As such, tax deductions are determined based on the value of your vehicle, which dictates a maintenance per kilometer and fuel per kilometer allowance.
What is the National Credit Act (NCA)?
The National Credit Act (NCA) came into effect on 1 June 2007 and requires all financial institutions and lenders to register as credit providers. Essentially, this Act aims to protect South African consumers by regulating credit-granting practices.
How does the National Credit Act affect me?
By making your credit and/or loan applications transparent, fair and easy to understand, the NCA gives you the knowledge and power to manage your debt effectively and pay it back comfortably.
Remember that you have both the right and the responsibility to understand and question how your credit agreements are structured – what payments you will be required to make, and what the terms and conditions involve.
Which credit providers and agreements are regulated by the NCA?
- Banks (including short-term loans, homeloans, overdrafts, credit cards and vehicle finance)
- retailers (including furniture finance, clothing accounts and store cards), and
- other credit providers (such as micro-loans and pawn transactions).
For more information you can phone the National Credit Regulator (NCR) on 0860 627 627, send an e-mail to info@ncr.org.za, or go to www.ncr.org.za.
