Buying a car through a bank can look affordable when you only see the advertised instalment. However, that amount rarely shows the full monthly cost.
You may still need to pay for theft and damage cover, tracking, annual licensing and finance fees. In addition, some finance deals include a large balloon payment at the end.
For many South Africans, rent to buy cars offer a simpler option. You pay one monthly amount, several key costs are included, and you can work towards owning the vehicle.
What Are Rent to Buy Cars?
Rent to buy is a vehicle subscription rather than a normal finance agreement.
You use the vehicle while making fixed monthly payments over an agreed period. Once you have completed the required payments and met the agreement conditions, you may have the option to purchase the vehicle.
With SA Motor Lease, qualifying customers may be able to purchase the vehicle for R100 at the end of the agreement.
Therefore, rent to buy gives customers a clear path towards possible vehicle ownership without applying for traditional bank finance.
Finance vs Rent to Buy: Renault Kwid
The Renault Kwid provides a useful example.
SA Motor Lease offers a Renault Kwid from R4,999 per month. This amount includes:
- Theft and damage cover
- Vehicle tracking
- Annual licensing
Renault currently advertises a new Kwid from R2,499 per month. However, the offer runs for 72 months and includes a 40% balloon payment.
The advertised total finance cost is R248,949. This amount excludes the initiation fee and monthly service fee.
Therefore, the R2,499 payment does not show the full cost of financing and using the vehicle.
Renault Kwid Cost Comparison
| Cost | Traditional finance | SA Motor Lease rent to buy |
|---|---|---|
| Monthly vehicle payment | R2,499 | R4,999 |
| Insurance or theft and damage cover | Approximately R1,086 | Included |
| Vehicle tracking | From approximately R99 | Included |
| Annual licensing | Approximately R500 per year | Included |
| Monthly finance service fee | R69.08 | No separate finance fee |
| Estimated monthly outflow | Approximately R3,795 | R4,999 |
| Agreement period | 72 months | 60 payments |
| Balloon payment | Approximately R71,520 | None |
| Estimated total cost over the agreement | Approximately R343,450 | Approximately R300,040 |
| End-of-term purchase amount | Balloon must be settled | R100 purchase option* |
*Subject to all required payments being completed and all agreement conditions being met.
Insurance costs will differ from one customer to another. For example, your age, location, claims history and risk profile can affect the monthly premium.
Tracking prices also differ between providers and packages. In addition, licensing fees may vary by province and vehicle weight.
Therefore, the figures in the table are estimates. However, they still show why customers should compare the full cost instead of only looking at the advertised instalment.
A Lower Instalment Does Not Mean a Cheaper Car
The financed Renault Kwid appears cheaper each month. However, the customer must continue paying for 72 months.
By comparison, the SA Motor Lease example runs for 60 payments. As a result, the finance customer may continue paying the instalment, insurance, tracking and licensing costs for an extra year.
The finance deal also includes a 40% balloon payment. In this example, that amount is approximately R71,520.
A balloon payment lowers the monthly instalment because part of the vehicle price is moved to the end of the agreement. However, the customer must still pay or refinance that amount.
SA Motor Lease does not leave the customer with a large balloon payment. Instead, after completing the required payments, the qualifying customer may purchase the vehicle for R100.
One Clear Monthly Payment
Financing a vehicle can create several separate bills.
First, you pay the bank instalment. Then, you must arrange theft and damage cover or comprehensive insurance. You may also need to install a tracking device and pay the licence renewal every year.
In addition, these costs may increase over time. They may also be charged by different service providers.
With SA Motor Lease, theft and damage cover, tracking and annual licensing are included in the R4,999 monthly payment.
Therefore, customers have one main vehicle payment to plan for each month.
This makes budgeting easier. It also reduces the number of separate costs that need to be managed.
Rent to Buy Is More Accessible
Traditional car finance depends heavily on your credit profile.
Banks usually check your credit score, income, existing debt and past payment history. As a result, you may struggle to qualify if you are blacklisted, under debt review or rebuilding your credit record.
Rent to buy uses a different application process.
SA Motor Lease considers applications from people who may not qualify for normal vehicle finance. Approval is still based on income, affordability and the required documents.
However, previous credit problems do not automatically stop you from applying.
Therefore, rent to buy cars can give more South Africans a chance to access reliable transport.
Rent to Buy Offers Better Overall Value
The lowest advertised instalment is not always the best deal.
Instead, you should compare:
- The full agreement period
- Insurance or theft and damage cover
- Tracking costs
- Annual licensing
- Finance fees
- The balloon payment
- The final purchase amount
In the Renault Kwid example, the estimated traditional finance cost reaches approximately R343,450 over 72 months.
Meanwhile, the SA Motor Lease option comes to approximately R300,040 over 60 payments, including the R100 purchase amount.
That is an estimated difference of more than R43,000.
Actual finance and insurance costs will differ between customers. Nevertheless, the example shows why it is important to look beyond the monthly instalment.
What Is Included with SA Motor Lease?
With SA Motor Lease, customers receive:
- One clear monthly payment
- Theft and damage cover
- Vehicle tracking
- Annual licensing
- No large balloon payment
- A shorter agreement in this example
- A possible R100 purchase option
- An alternative to traditional bank finance
As a result, customers get a more complete vehicle solution instead of only a monthly car instalment.
Choose the Better Way to Get a Car
Traditional finance may look cheaper at first. However, the extra costs, longer agreement and balloon payment can make it more expensive over time.
In contrast, rent to buy cars provide a clearer and more accessible option.
With important vehicle costs included and a possible R100 purchase option, SA Motor Lease gives customers a practical path towards owning a reliable car.
Browse the available vehicles and apply online to find out whether you qualify.