Views ‘on-the-road-costs’ as not being in line with prescriptions
On 3 August, we published an article on the National Credit Regulator’s (NCR) media statement, warning vehicle financiers (being registered credit providers) that they will be conducting a compliance monitoring exercise on vehicle licence and registrations fees payable under credit agreements. As part of this compliance monitoring exercise, the NCR obtained credit agreements from various vehicle financiers and reviewed the costs stated in the quotations.
The NCR, in a media statement dated 5 October, announced that they issued a compliance notice to BMW Financial Services (BMW), a registered credit provider, instructing them, amongst others, to refund all consumers whom they charged ‘on-the-road’ costs. According to a Business Day report, BMW intends to challenge the compliance notice by applying to the National Consumer Tribunal for a review.
It may very well be that BMW was chosen to send a message to the industry.
Our understanding of ‘on-the-road’ costs is that it often consists of many different components ranging from ‘licence and registration’ fees to ‘fuelling and delivery’ costs, if not provided for separately. Therefore, the possibility exists that at least a portion of the ‘on-the-road’ costs may be costs that are permitted by the National Credit Act, Act 34 of 2005 (NCA). However, it is important that motor vehicle dealers and financiers ensure that they specify these costs in accordance with the NCA.
This matter is one to follow, as was the ‘club fees’ charged by Edcon, as it emphasises the NCR’s commitment to ensuring that only permitted costs are included in the cost of credit to consumers.
Please click here to download a copy of the media release.