An instalment agreement offers you a financial facility to purchase a vehicle that is selected by you and is purchased by the bank. The bank then sells the vehicle to you over a negotiated period at an agreed interest rate.
|Deposit||Subject to credit risk; negotiable based on age of vehicle.|
|Period||Minimum 24 months; maximum 72 months.|
|Balloon Payment||Can be structured into your agreement|
|Tax||Should you use your vehicle for business usage, please refer to SARS for details on travel allowances, tax rebates and tax benefits.|
|Ownership||At the end of term when the vehicle is paid up in full, you will receive documentation from MFC that needs to be taken to the licensing authority to enable the change of ownership process to be completed.|
|Interest Rate||Market-related rates will apply. Choose between a fixed or a linked interest rate.|
|Settlement||Early-settlement option is available. There is no penalty on small and intermediate agreements.|
Balloon Payment option
The balloon payment option offers the benefit of reduced monthly repayments, with a lump sum repayment (referred to as the balloon payment) at the end of the agreement period.
At the end of the agreement period, you have the following options:
- Apply to refinance the balloon payment amount for a further period. (Terms and conditions will apply).
- Sell the vehicle.
- Paying the full balloon payment amount and take ownership of the vehicle.
Rate Payment options
MFC offers you the flexibility to select from one of two rate options:
The Linked-rate Option provides you with the potential benefits of fluctuating interest rates. In the event that the interest rate increases during the agreement period, your interest rate and therefore your repayments will increase accordingly. The reverse applies if the interest rate decreases during the agreement period: then you will benefit from lower corresponding repayments.
The fixed-rate option provides you with peace of mind in terms of fluctuating interest rates. In the event that the interest rate increases during the agreement period, your repayments will not be affected and your interest rate will remain the same.