top of page

Understanding Vehicle Finance in Johannesburg

Writer: salescarsfs
salescarsfs
Sep 26
5 min read

Updated: Oct 6

What is Vehicle Finance?


Vehicle finance is a loan to buy a car. It is usually set up as an instalment sale agreement. A bank or other lender pays for the car. You pay the lender back every month, with interest, over an agreed term. Many lenders offer terms of up to 72 months.


Until the car is paid off, the lender holds the title. You drive the car and look after it, but you can't sell it without settling the finance first.


Step 1: Work Out What You Can Really Afford


Start with the monthly amount you can comfortably pay. Don't focus solely on the price of the car you like. Then add the running costs that come with every car:


  • Comprehensive insurance. Lenders require it on a financed car. It can be a big monthly cost, especially for younger drivers.

  • Fuel. Think about how far you drive each day in Joburg traffic.

  • Services, tyres, and licence renewal.


If the total would stretch your budget every month, look at a cheaper car or a bigger deposit.


Step 2: Check Your Credit Record


When you apply, the lender will check your credit record with a credit bureau. It looks at how you've handled accounts in the past, such as store cards, cellphone contracts, and other loans.


Under the National Credit Act, you're entitled to one free credit report a year from each registered credit bureau. It's worth checking yours before you apply. If you spot a mistake, you can dispute it with the bureau. Paying accounts on time and keeping your existing debt down will help your application.


Step 3: Get Your Documents Ready


Having your paperwork ready speeds things up. For a personal application, lenders usually ask for:


  • Your South African ID

  • Your driver's licence

  • Your latest payslips (often the last three months)

  • Your latest bank statements (often the last three months)

  • Proof of address, such as a recent utility bill or lease


If you're self-employed or buying through a company, you'll need more. The CARS FS finance page lists the business documents needed, including business financials, six months of business bank statements, three months of personal bank statements for each director, and SARS tax documents.


Step 4: Choose Your Car


Now comes the fun part. The price of the car is the starting point for your instalment. Here are some examples from the CARS FS showroom at different price points, with the price listed on each car's page when this guide was published (checked 26 Sep 2026):


You can see all our cars in the showroom. We post new arrivals on TikTok at @carsfs.southafric.


Step 5: Apply and the Affordability Assessment


Once you've picked a car, you complete a finance application. The lender then does two main checks:


  1. A credit check, as in Step 2.

  2. An affordability assessment. The National Credit Act requires lenders to check that you can actually afford the repayments before they lend to you. They look at your income, your monthly expenses, and the debt you already have. Lending to someone who clearly can't afford it is called reckless lending, and the Act prohibits it.


Your payslips and bank statements show the lender your real income and spending. Be honest on your application.


Step 6: Understand the Offer Before You Sign


If you're approved, you'll get a quote or pre-agreement. Read it carefully and look at these parts in particular.


Interest Rate


Your rate depends on your credit profile and the lender. It can be fixed, so it stays the same for the whole term, or linked to the prime rate, so it moves up or down when prime changes.


Deposit


A deposit is money you pay upfront. It isn't always compulsory, but it lowers the amount you borrow. That means a lower instalment and less interest over the life of the loan. It can also help your application.


Balloon Payment


A balloon (also called a residual) is a lump sum that's moved to the end of the agreement. It makes your monthly instalment lower, but:


  • You pay interest on the balloon amount for the whole term, so the car costs more overall.

  • At the end, you still owe that lump sum. You'll need to pay it, refinance it, or trade the car in to settle it.


A balloon can work if you plan for it. But don't use one just to squeeze into a car you can't afford.


Fees and Insurance


Check the initiation fee and the monthly service fee, which the National Credit Act regulates. Check the insurance requirements too: comprehensive cover, and credit life insurance if the lender asks for it. The Act gives you the right to choose your own credit life insurer, as long as the cover meets the requirements.


Step 7: Sign, Insure, and Drive


Once you're happy, you sign the agreement, arrange comprehensive insurance, and take delivery of your car. If you can, set the debit order date for just after payday.


Frequently Asked Questions


Do I need a deposit to get car finance?

Not always. Some lenders approve finance without a deposit, depending on your credit profile and affordability. A deposit does lower your instalment and the total interest you pay.


Can I get car finance if I'm self-employed?

Yes, but you'll need more documents than a salaried person. This includes business financials, bank statements, and tax documents. The CARS FS finance page has a business application form and the full list.


What is a balloon payment?

It's a lump sum left over at the end of your finance agreement. It lowers your monthly instalment, but you pay interest on it throughout the term. You must settle it when the agreement ends.


Will applying for finance affect my credit record?

The lender will check your credit record when you apply. It's best to apply for the car you actually want rather than sending out lots of applications at once.


Ready to Find Your Car?


Or visit CARS FS at 471 Louis Botha Avenue, Highlands North, Johannesburg 2192. Browse all our stock in the CARS FS showroom.

 
 
 

Comments

Commenting on this post isn't available anymore. Contact the site owner for more info.
bottom of page
WhatsApp us