Government has given its informal backing to a vehicle-financing arrangement that could “double the number of potential new car customers” in SA, Wesbank chief executive Ronnie Watson says.

Government has given its informal backing to a vehicle-financing arrangement that could “double the number of potential new car customers” in SA, Wesbank chief executive Ronnie Watson says.


According to a report, legislation was expected to be introduced this year to allow the private leasing of vehicles, a mechanism that allows far lower repayments, making it more affordable to buy a car.


The automotive retailers association (RMI) and WesBank made submissions to the trade and industry ministry last year in which they suggested that government change the law to allow private leasing. At present, this option is only open to companies or to individuals with car allowances.


WesBank has reportedly been told that the task force established to look at changes to consumer credit laws had recommended a broad overhaul of the laws, which would include a move to enable private leasing.


"I am quite confident that the issue will now be addressed. There are just some amendments which need to be made," said WesBank spokesman Keith de Swardt.


RMI chief executive Jeff Osborne welcomed the news, but said he was disappointed by the slow response from government: "We want to see a revitalisation of car sales and believe it is time for innovation on the part of all partners."


Watson said that a few amendments could cut the monthly cost of using a vehicle 20 per cent "which could allow another five per cent of the population to have the opportunity of financing a new car".


He added that there would be broader benefits for SA from stimulating the automotive industry in this way.


"I strongly believe that if the prime rate remains down and vehicle-price inflation is kept below general inflation, and our applications on private leasing are successful, we could see a total motor market of approximately 500 000 to 600 000 units by 2008," Watson said.


WesBank asked government to “relax laws concerning minimum deposit, the maximum period of repayment and to address the fact that monthly instalments may not vary more than 10 per cent”, reported on Tuesday.