Best bank for vehicle finance in South Africa

Financing a vehicle is one of those decisions that has a major impact on your life and personal finances. It’s best to do a lot of research about how car financing works, this will save you a lot of money in the long run. Choosing the best bank for vehicle finance in South Africa will also benefit you a lot.

The best bank for vehicle finance in South Africa is WesBank, a division of FNB which is part of the FirstRand group. WesBank offers very reasonable interest and other vehicle protection options. WesBank allows you to finance vehicles from dealerships or private sellers, the vehicle must not be more than 20 years old or cost less than R30 000.

Other good vehicle financers include the Motor Finance Corporation which is part of Nedbank. Standard bank and ABSA are also good vehicle financers.

Interest rate

The interest rate is the first thing to consider when choosing a bank for financing your vehicle. Don’t think that your bank will offer you the best interest rate since you are their client. You might get a better interest rate elsewhere, your bank doesn’t care if you have been their client for 20 years, they won’t offer you a discount.

Your credit profile matters a lot when applying for vehicle financing, if you have a bad credit record then you will get charged a higher interest. If you don’t have any credit profile at all then it’s best that you start by building a credit profile before you apply for a loan. A good credit profile will lower your interest rate.

There are two options for interest rates, one is a fixed interest rate and the other is a linked interest rate. A fixed interest rate means that you will pay the exact amount of premium plus interest every month until you pay off your debt. A linked interest rate s linked to the prime lending rate of South Africa, if it increases, so will your instalment but if it decreases, you will pay less.

You are likely to pay more on interest if you choose the fixed rate but if the difference between the fixed rate and the linked rate is less than 2%; it’s best to choose the fixed rate. A lot of banks choose the interest option for you, ask questions and tell them which interest option you prefer.


The deposit reduces the total amount of money that you will pay over the long term but doesn’t reduce your interest rate. If anything, it can increase it, the banks make a lot less on interest when you put a huge deposit upfront, they compensate for this by increasing the interest rate.

The best way to go around this if you have a huge pile of cash saved up is to pay the minimum that is required on deposit, get an interest rate, wait for the first debit. Then you can put in the rest of your lump sum towards reducing your debt, they will not be able to change the interest rate at this point. The interest rate is charged on the amount of money that you owe.

The bank will not penalize you for this, they might try to make the process difficult but you should make it very clear that you are doing a capital deduction.

Dealership finance department

Each dealership has a person that works on the finance department. They bargain for the lowest interest rates with banks on your behalf. The danger about these people is that they get commissions when they refer clients to certain banks. A lot of people have complained about them not being honest or fully transparent.

They have an obligation to work in the best interests of the client and not of the bank but humans are humans, personal greed takes over.


The best bank for vehicle finance is one that gives you the lowest interest rate. Shop around and bargain for lower interest. Do you have any thoughts or questions? Comment below.

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