Buying a car involves two separate transactions that people tend to run together: buying the vehicle, and financing it. Keeping them apart is what protects you, because a good price on a car with expensive finance is not a good deal.
This page covers what is required for both, and the checks that prevent the expensive problems — outstanding finance, undisclosed accident damage and a title you cannot transfer.
Eligibility Requirements at a Glance
What is required to buy and register a vehicle.
- A valid South African ID, or a passport with a valid permit
- A valid South African driver’s licence to drive it
- Proof of residence, for registration with the licensing authority
- Funds, or approved vehicle finance from a registered credit provider
- Comprehensive insurance, compulsory where the vehicle is financed
- Registration in your name at a licensing authority, with the prescribed forms and fees
- A roadworthy certificate, required for change of ownership in the prescribed circumstances
- The seller’s valid registration certificate for the vehicle
Income and Affordability Requirements
The National Credit Act 34 of 2005 requires an affordability assessment before credit is granted: the provider must verify gross income, subtract statutory deductions, subtract the prescribed minimum living expenses and subtract existing debt repayments. Lending without that assessment is reckless lending and is prohibited.
Work out the true monthly cost before you shop. The instalment is only part of it. Add comprehensive insurance, fuel, licensing, tyres, servicing and a realistic maintenance provision. A car affordable on the instalment alone is frequently unaffordable in total, and that is the most common way people get into trouble.
Get pre-approved by your own bank first. It tells you your real budget, removes the pressure of an on-the-spot decision, and gives you a rate to compare a dealer’s offer against. It is the single most useful step in the process.
A deposit does more than lower the instalment. It reduces the amount financed, the total interest paid, and the period during which you owe more than the car is worth.
Compare on the total amount repayable, not the instalment. Longer terms and balloon payments lower the monthly figure and raise the total substantially.
Understand a balloon payment before agreeing to one. It leaves a large amount owing at the end of the term, and if the car is worth less than the balloon you cannot sell or trade without finding the difference in cash.
Credit and Financial Requirements
Verify the vehicle before paying anything. Confirm the details on the registration certificate match the vehicle, that the VIN and engine number match the papers and the car, and that the seller is the registered titleholder. A seller who is not the titleholder cannot transfer ownership.
Check for outstanding finance. A vehicle with finance still owing cannot be transferred, and the finance house remains the titleholder. Buying one privately can leave you with no car and no money. Confirm the position before paying.
Have an independent inspection done. An inspection by a body you choose — not one the seller arranges — identifies accident repair, structural damage and mechanical problems. It costs a small fraction of the purchase price and it is the best money in the transaction.
Consumer protection applies to dealers, not private sellers. The Consumer Protection Act 68 of 2008 gives rights against a supplier in the ordinary course of business, including the implied warranty of quality. A private sale is generally “voetstoots” and those rights largely do not apply, which is why the inspection matters most in a private purchase.
Get your own insurance quotes before signing. Comprehensive cover is compulsory on financed vehicles and is a substantial monthly cost. Bundled insurance is convenient and rarely the cheapest, and the difference over five years is large.
Question every added product. Service plans, extended warranties, tracking devices and paint protection are often added to the financed amount, so you pay interest on them for years. Ask the cost of each, whether it is compulsory, and consider paying separately.
Register the change of ownership promptly. Notify the licensing authority within the prescribed period, because until the change is recorded you may remain liable for traffic fines and the vehicle’s status.
Documents and Verification Required
What is needed for the purchase, the finance and the registration.
- South African ID document, smart ID card or valid passport with a permit
- Latest payslip, or the latest three where income varies
- Latest three months’ bank statements, or electronic retrieval consent
- Proof of residence, where the provider requires it
- Exact banking details for payout and the debit order mandate
- A cellphone you control, for one-time PIN verification
- A valid South African driver’s licence
- The vehicle’s registration certificate and the seller’s identity document
- A roadworthy certificate, where required for the change of ownership
- Insurance quotation or confirmation of cover
- The prescribed licensing authority forms for change of ownership and registration
- Proof of the deposit and the purchase agreement
- An independent inspection report
How to Apply and Improve Approval Readiness
Get pre-approved, set a total monthly budget including running costs, then shop. Inspect the vehicle independently, verify the papers and the finance position, and only then negotiate.
Negotiate the vehicle price first and separately, and settle the finance afterwards. A dealer who will only discuss the monthly instalment is directing your attention away from the number that matters.
- Get pre-approved by your own bank before shopping
- Budget the total monthly cost, not just the instalment
- Negotiate the vehicle price separately from the finance
- Compare finance offers on total amount repayable
- Avoid a balloon payment unless you understand what will be owing
- Verify the registration certificate, VIN and titleholder
- Check for outstanding finance before paying a private seller
- Have an independent inspection done by a body you choose
- Get your own insurance quotes and question every added product
- Register the change of ownership within the prescribed period
Frequently Asked Questions
What is the most useful preparation?
Pre-approval from your own bank. It sets a real budget, removes on-the-spot pressure and gives you a rate to compare a dealer’s offer against.
What should I check on a used car?
That the registration certificate, VIN and engine number match, that the seller is the titleholder, that no finance is outstanding, and the results of an independent inspection you arranged.
Do I have the same rights buying privately?
No. The Consumer Protection Act applies to suppliers in the ordinary course of business. A private sale is generally voetstoots, which is why an independent inspection matters most there.
Should added products be financed?
Usually not. Service plans, warranties and trackers added to the financed amount attract interest for years. Ask the cost of each and whether it is compulsory.
Finance criteria, registration requirements, roadworthy rules and fees are set by lenders, the licensing authorities and the National Road Traffic Act framework, and are revised. Confirm current requirements with the lender and your licensing authority.