We at MOTUS Select have been working hard to provide our customers with better and better service. Our recent introduction of the National Boost Your Deal service solutions is geared towards helping as many people as possible to make their dream of owning a car a reality. Our financing specialists have set up packages available to anyone buying a used car from us and have focused on making the solutions customisable to best suit your needs and budget.

One such solution is the No Deposit option, which helps to eliminate one of the biggest problems car buyers have been faced with in the past. Traditionally, when buying a large item such as a house or car, you would apply for a loan to help cover the total cost. It’s always been standard procedure for a buyer to have to put down a cash deposit as leverage to start the purchasing process. Unfortunately, saving up money for a car isn’t always achievable, as normal living expenses already absorb most of the wages of ordinary South Africans. Now, for the first time, you won’t have to give up on your dream of finding the best-used cars for sale if you don’t have savings to offer as an upfront deposit.

How Does It Work?

Providing an upfront deposit when buying a car will greatly reduce the total amount you’ll still have to pay, and if you’re paying off the car through financing, your monthly installments will be less. If you choose not to provide an upfront deposit, it means the full total cost of the vehicle will have to be requested through a car loan application, which will push your monthly repayment costs up.

You can also opt only to provide a large sum of money towards the end of your car payment period – this is a ‘balloon payment’. For example, you don’t have enough money available to offer a deposit on a car now, so you opt for the no deposit plan and agree to a balloon payment settlement. This means you’ll have to pay significantly larger sums at the end of your repayment schedule, or you could reach an agreement to pay in a lump sum when the final few payments are due on your car.

There are various alternative payment plans available if you want to go the no deposit route. Still, it is important to understand how this option will affect your interest rates and repayment plan. Your financial services provider at the dealership will guide you through your options and help with finding the best solution.

What You Need To Know

While not having to pay a deposit sounds like a great deal, it’s important that you are aware that this decision comes with a serious responsibility. Failing to pay that lump sum you’ve promised to provide at the end of your car’s repayment plan means you could very likely have your vehicle repossessed – a terrible shock to suffer if you’ve been paying off your vehicle for years and are one or two payments away from it being yours.

If you don’t opt for a balloon payment, other available options can eliminate the need to pay a large amount in one go, but it will most likely mean your repayments each month will be more, or you may end up losing money due to interest rates changes. It is crucial that you look at all your options when buying a used car and understand the fine print and impact of whichever payment plan you choose.