A unique system that will allow groups of consumers to purchase vehicles together has been launched in South Africa in order to make cars more affordable to more people. It is a joint venture between Eagle Corner, one of the largest Ford and Mazda dealerships in the country, and I-Save, specialists in consortium administration.
A unique vehicle collective purchasing system, aimed at making cars more affordable for South Africans, has been launched. It is a joint venture between Eagle Corner, one of the largest Ford and Mazda dealerships in the country, and I-Save, specialists in consortium administration.
Groups of 120 members, who are planning to each buy a new vehicle, get together to pay monthly instalments for 60 months. Two new vehicles are allocated to the members every month by means of a draw and a tender.
The draw is open to all members, while the tender is allocated to the member who tenders the highest number of instalments in advance. At the end of the 60-month period, each member will get a new vehicle and the consortium is disbanded.
Consortium purchasing is not really unique to South Africa and, in many ways, the system is similar to the “stokvel” concept, blending in interest-free finance and resulting in an alternative form of financing.
“However, where the Eagle Corner system is concerned, there is currently nothing similar in South Africa,” said John Landey, managing director of the dealership.
It eliminates the need to apply for finance through traditional institutions and offers an alternative, low-risk buying solution. There is no interest payable and asset prices are monitored and instalment adjustments are made as and when car prices are increased.
“The collective purchasing system has proven to be an amazing success in countries such as Brazil, Argentina and Mexico. In Brazil, new vehicles bought on this basis account for approximately 20 per cent of the country’s total new vehicle sales and, in a market that is nearly five times the size of South Africa’s, that is a lot of vehicles,” said Landey.
“As one of South Africa’s largest Ford and Mazda dealerships, and having been in the motor retail business for over 18 years, we are well-positioned to make a success of this venture in South Africa,” he said.
“To start off, we will first be offering the new Ford Fiesta three-door Flite and the Ford Bantam 1300 Leisure from February 25 2002 to the first Consortium, and we’ll progress from there. Members of the first consortium will pay a joining fee of R1 596 and 60 monthly instalments of R1 480,” he said.
