VW has been ordered to refund its customers for prohibited fees charged by dealers. Picture: MIKE HOLMES
VW has been ordered to refund its customers for prohibited fees charged by dealers. Picture: MIKE HOLMES

If you’ve recently bought a car and are expecting to be refunded for “on-the-road” fees you paid, don’t hold your breath.

SA’s motor companies have largely adopted a wait-and-see attitude in the wake of Volkswagen being ordered to cease charging its customers on-the-road, administration and handling service fees, a ruling against which  VW Financial Services has appealed.

Last year, the National Credit Regulator (NCR) launched an investigation into on-the-road fees charged by dealers and found the charges contravened the National Credit Act (NCA).

Volkswagen Financial Services took the matter to the National Consumer Tribunal (NCT) which earlier this month agreed with the NCR’s findings and instructed VW Financial Services to refund, with interest, customers it charged for such fees on credit agreements since 2007.

The tribunal said credit providers couldn’t add items to the consumer’s principal debt if doing so contravened the National Credit Act.

“Allowing credit providers carte blanche to include any items in the credit agreement on the basis that they had been invoiced for those items by the dealer, and then passing it on to the consumer in the credit agreement, manifestly runs counter to the purpose of the NCA …” the tribunal said.

These fees charged by dealers — which include the cost of licensing, registration and predelivery checks among others — can sometimes cost thousands of rands and VW is reputedly charging between R3,000 and R4,000 per vehicle.

However the tribunal’s ruling isn’t being seen by car makers as a blanket decree for the industry.

VW Financial Services has appealed against the order and won’t make any refunds until this is finalised. Most manufacturers polled by Motor News are reviewing the matter and aren’t yet ready to comment.

Toyota SA says it declines to comment at this stage, and a similar response was received from Unitrans, importer of Opel.

Nissan spokesperson Veralda Schmidt responded: “These costs are charged by the dealers and not by the manufacturer. However, based on this ruling we are engaging with our dealer council to interrogate these costs and the calculation thereof.”

Suzuki Auto SA’s Toni Herbst said the management team has been in touch with WesBank to obtain all necessary information, and was awaiting feedback to formalise an official comment.

Porsche spokesperson Christo Kruger said: “We remain an interested bystander in this matter. Pending the outcome of an appeal we will be in a position to formulate an opinion."

Gerald Hong, Ford Credit SA’s Brand, Marketing and Sales Manager, said: “We are busy with the customer services team in the US regarding this matter. We are awaiting legal opinion for the response to the customers.”

Motus automotive group, importer of Kia, Hyundai, Mitsubishi and Renault vehicles, was reviewing the matter internally.

BMW Financial Services, which received a similar Compliance Notice from the NCR in October 2017 relating to on-the-road-fees charged by dealers, says it disagrees with and disputes the contents of the notice issued by the Regulator and has objected to the notice.

“BMW is of the view that the on the road fee is a fee agreed between the dealer and the consumer. At this point the matter is sub judice, as the BMW matter has not been heard,” says Alexander Parker, BMW SA’s Manager: Business Communications.

Nomsa Motshegare, CEO of the NCR, welcomed the tribunal’s judgment and said it affirmed the protection given to consumers.  She said the regulator would continue to conduct industry-wide investigations and root out illegal charges and fees on credit agreements.