Car Buying Traps to Avoid in South Africa

Buying a car in South Africa can be tricky if you’re not prepared. From hidden costs to financing traps and scams, there are plenty of ways to end up paying more than you should – or worse, losing your money entirely. Here’s what you need to know:

• Hidden Costs: Watch out for On-the-Road (OTR) fees, delivery charges, inflated tracking device costs, and overpriced warranties.
• Financing Pitfalls: Low monthly payments may hide high interest rates or balloon payments. Always check the total cost of the loan.
• Fraud Risks: Scams include fake listings, forged documents, and escrow fraud. Verify everything before making payments.
• Used Car Inspections: Check the engine, brakes, tires, and vehicle history. Rust, uneven wear, or mismatched paint can signal bigger issues.
• Legal Rights: South Africa’s Consumer Protection Act offers a safety net for dealership purchases, including the right to repairs, replacements, or refunds for defective cars.

To avoid financial stress or falling victim to fraud, take your time, inspect the car thoroughly, and understand your financing options. Always verify documents and the seller’s credibility before making any commitments.

Top 10 SCAMS on USED CARS (Car Buying Risks) Kevin Hunter the Homework Guy

Hidden Costs and Financing Problems You Should Know About

Car dealerships and lenders often present attractive monthly payment plans that can disguise hefty additional costs. These hidden expenses can quickly inflate the total price, turning what seemed like a great deal into a costly mistake.

Hidden Fees You Need to Watch For

The advertised price usually covers just the base cost of the vehicle. One of the biggest hidden expenses comes from On-the-Road (OTR) fees, which typically range between $2,650 and $3,975. These fees include licensing, registration, number plates, and roadworthy certificates for used cars.

Dealerships also tack on delivery fees, adding another $1,985 to $3,310 to your bill. These cover car preparation, cleaning, fuel, and administrative tasks like license applications and arranging plates. While many of these fees are negotiable, dealerships rarely disclose that upfront.

Bank initiation fees, capped at $795 by the National Credit Act, are another area to monitor. Some lenders attempt to charge more, so it’s essential to verify that the fee aligns with legal limits.

Extended warranties and service plans are often pitched as must-haves, costing between $3,310 and $13,240. While they provide added coverage, they’re frequently overpriced and may include services you’ll never use. Always request a detailed breakdown of what’s included, and don’t hesitate to question unnecessary charges.

If your vehicle is financed, insurance companies often require a tracking device installation, which can cost $660 to $1,325 upfront, plus $66 to $132 monthly. Dealers sometimes inflate these costs well above market rates, so compare prices independently.

Beyond these fees, don’t forget about ongoing costs like insurance, fuel, maintenance, and optional extras. These recurring expenses can significantly increase the overall cost of ownership.

Understanding these hidden fees is vital before diving into financing options.

How to Check Financing Deals Properly

Once you’ve identified hidden costs, the next step is to carefully evaluate financing deals. Monthly payment quotes often obscure the true cost of the car. Dealers frequently emphasize affordable monthly amounts while withholding details about the total purchase price or the interest you’ll pay over time. Stretching payments across longer terms can make expensive cars appear more affordable, but it often leads to paying far more in interest.

Balloon payments are another financing trap to watch for. These loans reduce monthly payments by deferring a large lump sum to the end of the term. While this structure might seem appealing initially, it leaves you with a hefty final payment that can strain your finances.

The difficulty of securing vehicle financing is also worth noting. Currently, only 30% of vehicle finance applications are being approved in South Africa, highlighting the importance of understanding your financial options before visiting dealerships.

"The financier merely finances the principal debt, which constitutes the purchase price and other extras, including the on-the-road fee plus other services" – Judge Patrick Malungana

Interest rate types play a crucial role in your financing decision. Fixed rates provide consistent monthly payments but won’t benefit from potential rate decreases. Variable rates, on the other hand, might start lower but can increase, potentially straining your budget.

Here’s how different loan terms can impact your costs for a $198,675 loan at 10% interest:

While a longer term reduces your monthly payment by $1,289, it adds an extra $28,760 in interest over the life of the loan.

To protect yourself, always ask for the total purchase price, not just the monthly payment. Shop around for financing options, as rates can vary depending on your credit score and risk profile. Getting pre-approved by your bank before visiting dealerships can give you a clear budget and help you negotiate better terms.

Finally, be cautious before transferring any money. Always call the dealership’s official number to confirm the deal. Pressure to pay upfront or requests for unusual payment methods are major warning signs of potential fraud.

How to Spot and Avoid Fraudulent Sellers

Car scams have become increasingly crafty, taking advantage of the anonymity of the internet and the lure of bargain deals. These scams can cost unsuspecting buyers thousands of dollars, so it’s crucial to recognize the warning signs and steer clear of fraudulent sellers.

Common Scams and Warning Signs

One of the easiest traps to fall into involves prices that seem almost too good to be true. Scammers often list vehicles at prices well below their market value to attract buyers who may overlook red flags in their eagerness to snag a deal.

Fake vehicle listings are a frequent tactic. Scammers might use stolen images from legitimate dealerships or private sellers to advertise cars that don’t exist. Once a buyer expresses interest, they’ll spin elaborate stories – sometimes involving personal hardships – to justify a rushed sale.

For instance, in August 2022, a buyer in Vaal, South Africa, paid an online dealer who promised delivery within a week. After receiving the payment, the dealer vanished. The buyer’s lawyer later advised checking the company’s registration and reporting the incident to authorities.

Documentation fraud is another common scheme. Scammers may present fake ownership papers, forged registration documents, or counterfeit vehicle history reports. Always insist on seeing original documents, and verify that the registration matches the seller’s name. Be cautious if there’s any sign the vehicle is still under financing.

Fake escrow sites are also on the rise. These sites appear professional and claim to hold your payment until the car is delivered. However, they are often scams, and once you transfer money, it’s gone. Never use an escrow service suggested solely by the seller.

Other red flags include:

• Sellers who avoid meeting in person or insist on communicating only via email.
• Requests for your banking details from unknown individuals.
• High-pressure tactics, such as claiming a limited-time offer or an emergency.
• Refusal to provide the Vehicle Identification Number (VIN).
• Prices that are significantly below market value without a logical explanation.

To confirm a seller’s legitimacy, research the car’s market value on trusted automotive websites. Look up the seller online – if they have no online presence, it’s better to move on. For dealers, verify the company’s existence by checking invoices for complete details like the company name, registration number, office address, and personnel. Missing or incomplete information is often a red flag.

Understanding these tactics can help you avoid falling victim to scams. Next, let’s look at some practical tips to ensure your safety when buying cars online.

Safety Tips for Buying Cars Online

When buying a car online, taking precautions is essential to safeguard both your money and personal safety. The anonymity of online transactions makes it easier for scammers to operate, so staying vigilant is key.

First, always arrange to meet the seller in a safe, public location during daylight hours. Ideal spots include police station parking lots, busy shopping centers, or other well-lit areas with visible security. Bring a friend or family member with you, and share your location details with someone you trust.

Verify the seller’s identity before entering serious negotiations. Ask to see their valid driver’s license and ensure it matches the name on the vehicle’s title. If the transaction involves a large sum of money, it’s worth reviewing the seller’s online profiles to confirm their credibility.

Pay attention to communication red flags. Sellers who refuse to provide a phone number, avoid voice calls, or insist on email-only communication should raise concerns. Genuine sellers are typically open to direct conversations.

When it comes to payment, never transfer funds based solely on photos or verbal promises. Ensure that any payment has cleared in your bank account before finalizing the deal. If a seller demands upfront payment before you’ve inspected the vehicle, walk away.

Always verify the vehicle itself. Request the VIN and use it to check the vehicle’s history and details online. Tools like Google Maps can help confirm the seller’s address and contact number. Ask for additional photos, videos, or documents to ensure the listing is legitimate.

Finally, use secure platforms for online purchases and thoroughly review the website’s terms, contact details, and business information. If anything seems suspicious, dig deeper or abandon the deal altogether.

Above all, trust your instincts. If something feels off or the seller seems evasive, take the time to double-check every detail. It’s better to walk away than risk becoming a victim of fraud.

sbb-itb-09752ea

How to Inspect Second-Hand Cars Before You Buy

Buying a used car can be a smart move, but only if you do your homework. With domestic car sales in South Africa reaching 227,514 in the first half of 2021 – a 40% jump from 2020’s numbers – it’s clear the second-hand market is thriving. But along with opportunities come risks, so inspecting a vehicle thoroughly is key to avoiding expensive mistakes.

The golden rule? Use your head, not your heart. Even if you love a car at first sight, be ready to walk away if the inspection reveals serious flaws.

Pre-Purchase Inspection Checklist

Always inspect the car during daylight hours in a well-lit space. Poor lighting can mask defects that might cost you later. Gustav Erlank, Auto Services Director, puts it plainly:

"A vehicle in good running condition shouldn’t have any oil leaks, unusual noises or strange smells… What may seem [like] small mechanical issues can result in major expenses over time, whereas bodywork issues are often cosmetic. That said, vehicles with rust and severe body damage should be avoided."

Engine and Mechanical Components

Pop the hood and take a close look. Watch for oil leaks, which often appear as dark stains under the car. Start the engine and listen carefully – odd noises, difficulty starting, or vibrations when idling are warning signs. Check the exhaust for excessive smoke, as it could point to internal engine trouble. Also, inspect fluid levels: engine oil should be clean, and coolant should be clear.

Transmission and Gearbox

When test driving, pay attention to how the transmission functions. Manual gearboxes should shift smoothly without grinding, while automatic ones should operate seamlessly without hesitation or clunking. A burning smell during gear shifts is a red flag for costly repairs.

Brakes and Safety Systems

Test the brakes by applying steady pressure. They should work smoothly without squeaking, grinding, or causing the steering wheel to shake. A soft or spongy brake pedal – or a car that takes too long to stop – suggests brake system issues. Since brakes are critical for safety, any problems need immediate attention.

Body and Paint Work

Examine the exterior for signs of past accidents or poor repairs. Look for mismatched paint, uneven panels, rust spots, or alignment issues. Luci Williams, getWorth Operations Director, advises:

"Never settle for any issues on a second-hand vehicle. These will always end up costing you money further down the road. If there are any cosmetic defects, always ask why this work was done, as there may be a more serious underlying issue."

Dashboard and Electrical Systems

Turn on the ignition and ensure all dashboard lights briefly illuminate. Test every electrical feature, from windows to headlights, to confirm they work properly.

Tires and Suspension

Inspect the tires for uneven wear, which could signal alignment problems, suspension issues, or neglect.

If you’re unsure about any of these checks, consider hiring a professional mechanic to inspect the car. Many mechanics offer pre-purchase inspections for a small fee, which can save you from hefty repair bills later. Nicole Miskelley, PMR Auto & Diesel Repair Manager, explains:

"Most reputable dealerships allow this, but some may have a salesperson ride along for safety. Doing this can allow for someone outside of the dealership to take a once-over on it and note any damage or potential repairs the dealer repair shop might have missed."

Once you’ve completed the physical inspection, the next step is verifying the car’s history.

How to Use Vehicle History Reports

While a physical inspection is crucial, a vehicle history report can reveal issues you can’t see. With nearly 30% of used cars imported to South Africa from the USA having hidden problems, these reports are essential for making informed decisions.

Understanding the Statistics

Here’s what the numbers say: 1 in 5 cars has been in an accident, 1 in 15 has been rebuilt, 1 in 25 has a tampered odometer, and 1 in 50 is a salvaged vehicle. These figures highlight why checking a car’s history is so important.

Obtaining Vehicle History Reports

You can get a vehicle verification report for R45 if the dealership provides it. If not, you can purchase one through the First Check platform for R99. It’s a small price to pay for peace of mind.

What to Look For

A good vehicle history report includes details on ownership, title status, liens, accident records, theft records, and service history. However, keep in mind that not all accidents are reported, especially if repairs were done outside formal insurance claims.

Verification Steps

Double-check that the Vehicle Identification Number (VIN) on the car matches the VIN on the report and all related documents. Cross-reference the report’s details with your physical inspection. Be wary if the seller refuses to provide the car’s history or limits access to it.

When you combine a detailed physical inspection with a comprehensive vehicle history report, you significantly reduce the risk of buying a car with hidden problems. If anything seems off or doesn’t add up, it’s better to walk away and look for another option. After all, it’s easier to avoid a bad purchase than to fix one.

Your Legal Rights and Protections When Buying a Car

Knowing your legal rights as a car buyer in South Africa can save you a lot of money and shield you from dishonest sellers. South African law offers robust consumer protections, particularly when purchasing from dealerships. However, these protections differ significantly depending on whether you’re buying from a dealer or a private seller. Together with the precautions discussed earlier, understanding these legal safeguards ensures a more secure car-buying experience.

Consumer Rights for Car Buyers

The Consumer Protection Act (CPA) is your main defense against unfair practices in car sales.

"The CPA governs the entire lifecycle of consumer transactions: the promotion (advertising and marketing), the transaction itself (the sale or lease agreement), and the goods or services supplied – including that used bakkie, sedan, or SUV you’re considering."

The CPA generally applies to individual consumers and businesses or trusts with an annual turnover below $1.3 million. One of its standout provisions is the implied warranty of quality. This means any car you purchase from a dealer is legally presumed to be in good condition, functional, and free from defects. You don’t need to buy an extended warranty to benefit from this protection.

If the vehicle fails to meet quality standards within six months of delivery, you can return it to the dealer without penalty. This covers not only major mechanical failures but also multiple smaller issues that collectively qualify as defects. While thorough inspections can help avoid problems, these legal protections act as a safety net for unforeseen issues.

The Three Rs: Repair, Replacement, or Refund

Section 56 of the CPA gives you the right to choose between repair, replacement, or refund if a defect arises [33,35]. Dealers cannot insist on repairs if you prefer another option, though practical factors might influence your decision.

Ann Goslin, Executive Officer of the South African National Consumer Union, explains:

"If the problems are ‘minor’ and can be easily fixed, the consumer has no recourse to ‘replace’ or ‘refund’ as long as the supplier carries out the repairs quickly and efficiently, so that the vehicle is returned in a functionally new condition."

Additionally, if a defect reoccurs within three months of a repair, you are automatically entitled to a replacement or refund.

The End of "Voetstoots" Sales

Thanks to the CPA, dealers can no longer sell cars "voetstoots" (as-is) without disclosing all known faults. Suppliers cannot bypass these requirements.

Real-Life Cases Highlighting Consumer Protections

Court cases provide real-world examples of how these protections work. In Toyota Randburg v. Ndlovu, a second-hand BMW’s engine failed just four days after purchase. The court ruled in favor of the buyer, placing the burden on Toyota to prove the failure wasn’t due to a defect.

In Motus Corporation (Pty) Ltd v Wentzel, the court found that multiple issues in a new car – like warning lights and strange noises – constituted a defect under the CPA. The supplier was required to attempt repairs before the buyer could demand a refund.

Another case, Lazarus Motor Company v Robert, confirmed that even cosmetic issues, such as rust in a new Ford Everest, could qualify for remedies, demonstrating that defects aren’t limited to mechanical failures.

Limited Protections for Private Sales

Purchases from private sellers offer far fewer legal safeguards. The CPA doesn’t cover private transactions, meaning "voetstoots" clauses can be included. In such cases, you buy the car "as-is", with recourse only for latent defects or fraud. This makes thorough inspections and a detailed vehicle history report even more essential when buying privately.

When You Need Legal Help

Knowing your rights is just the beginning. Acting on them when problems arise is equally important. Jakkie Olivier, CEO of the Retail Motor Industry Organisation (RMI), emphasizes:

"As an organisation that champions the rights of motorists and service providers in the motor industry we often come across cases where there is little to no understanding of the basic rights as captured in the Consumer Protection Act. This leaves parties open to possible exploitation."

Document Everything

Start by documenting all issues and communications with the seller. Keep repair estimates, photos of defects, and copies of every correspondence. These records will be crucial if you need to escalate the matter.

Escalating the Issue

If defects arise, notify the seller in writing immediately [33,35]. For dealer purchases, request a repair, replacement, or refund under the CPA and allow the dealer a reasonable time to address the issue. If they fail to act, you can contact the Motor Industry Ombudsman of South Africa (MIOSA) for assistance.

Johan van Vreden, the Motor Industry Ombudsman, advises:

"The more serious the failure, and the more safety-critical the component (such as brakes or steering), the stronger your case will be."

MIOSA usually resolves disputes within three months. It’s important to note that the ombudsman mediates disputes impartially, rather than automatically siding with consumers or dealers.

When Court Action Is Necessary

If MIOSA cannot resolve the issue, you can escalate the matter to the National Consumer Commission, National Consumer Tribunal, or Consumer Court. Before approaching the tribunal, you must attempt to resolve the dispute directly with the seller. For complex or high-stakes cases, consulting a lawyer may be necessary. Legal professionals can help you assess whether a civil lawsuit is viable and guide you through the process.

Preventing Issues from the Start

The best legal protection is being proactive. Always get everything in writing, including quotes and agreements. For private sales, ask for a written list of known defects and include it in the sale agreement. For online purchases, meet sellers in secure locations like bank parking lots or police stations.

Lizelna Lombard, Head of Legal at WeBuyCars, sums it up well:

"The CPA provides substantial protection, but it requires consumers to be aware of their rights and suppliers to conduct their business with transparency and fairness. Knowing these provisions empowers you to navigate the used car market with greater confidence."

Understanding your rights equips you to make informed decisions and avoid unnecessary risks. With the right knowledge and thorough documentation, you can navigate South Africa’s car market confidently while keeping legal remedies as your safety net.

Conclusion: How to Make Smarter Car-Buying Decisions

Buying a car in South Africa doesn’t have to be overwhelming if you approach it with the right mindset and preparation. Success in the process comes down to careful planning, staying alert, and understanding your rights as a buyer.

Start by setting a realistic budget. Factor in not just the car’s price but also additional costs like insurance, registration, maintenance, and potential repairs. When looking at financing options, take the time to read the fine print and calculate the true cost of credit. Those low monthly payments might seem appealing at first glance, but they can sometimes hide high interest rates or long loan terms that cost you more in the end.

Be cautious of scams, especially on platforms like Facebook Marketplace. In 2025, the South African Police Service issued a warning about a rise in car deposit scams where sellers handed over vehicles after receiving fake proof of payment, only to discover the funds never arrived. If a seller pressures you to act quickly, it’s often best to walk away.

Thoroughly inspecting the vehicle and reviewing its history report is another key step. This helps you spot any hidden issues before committing to the purchase. Additionally, familiarize yourself with the Consumer Protection Act. This law gives you rights to repairs, replacements, or refunds if the car has defects. Keep detailed records of all your interactions and, if needed, escalate disputes to the Motor Industry Ombudsman of South Africa.

Although online scams and fraud schemes are becoming more sophisticated, a combination of knowledge and careful action can help you navigate South Africa’s car market successfully. The best deal is one that brings peace of mind, not headaches down the road. By following these strategies, you can avoid common pitfalls and drive away with a reliable vehicle at a fair price.

FAQs

What hidden costs should I be aware of when buying a car in South Africa?

When buying a car in South Africa, it’s important to be prepared for extra costs that might not be immediately obvious. These can include:

• Transfer fees: Charges for changing the vehicle’s ownership.
• Roadworthy certificates: A must-have for registering a pre-owned car.
• Outstanding fines: Any unpaid traffic fines linked to the car.
• Insurance: Often required before you can drive the car off the lot.
• Registration and licensing fees: Essential for legally driving the vehicle.
• Maintenance and repairs: Second-hand cars, in particular, might come with unforeseen issues.

Knowing about these potential expenses ahead of time can help you plan your budget better and avoid any unexpected financial stress.

How can I make sure an online car seller is legitimate and avoid scams?

To make sure an online car seller is trustworthy and to avoid falling victim to scams, start by digging into their background. Check for reviews or ratings from past buyers and confirm if the seller has a verified business presence. Legitimate sellers will typically provide clear information, including their full business name, registration details, and a physical address. Take the extra step to cross-check this information with official records.

Be wary of sellers who demand upfront payments or push for cash-only transactions. Stick to well-known platforms or marketplaces that offer buyer protection. If you’re purchasing a used car, arrange to meet the seller in person at a safe, public location. Take your time inspecting the vehicle thoroughly before making any commitments. And above all, trust your gut – if something doesn’t feel right, it’s better to walk away.

What are my rights if I buy a defective car from a dealership in South Africa?

In South Africa, the Consumer Protection Act (CPA) protects your rights when you buy a defective car from a dealership. According to the CPA, you can request a repair, replacement, or refund if the car doesn’t meet acceptable quality standards. This applies within six months of the vehicle being delivered.

If the dealership fails to address the problem, you can take the issue to the Motor Industry Ombudsman of South Africa for help. Be sure to keep detailed records of your purchase and all communications with the dealership to strengthen your case.

Related posts

• 10 Tips to Avoid Car Scams in South Africa
• Where to buy safe used cars in South Africa
• Avoid scams when buying used cars in SA
• Hidden Costs When Buying a Used Car in South Africa