In September 2025, the Supreme Court of Appeal held that On The Road fees added by dealers to the purchase price of vehicles sold by them are part of the transaction between the dealer and the consumer. OTR fees may be included as part of the principal debt under the ensuing credit agreement between the credit provider and the consumer as long as they are not similar to charges and fees mentioned in section 102(1) of the National Credit Act.
To ensure a fair and transparent credit market and protect consumers, credit providers must clearly state the nature of and cost of each item of OTR fees. Consumers must be given the option to pay the fees in cash or to have the fees financed. Consumers must be told of the financial consequences of financing the OTR fees which will attract interest and all other charges. The court illustrated this by an example at current interest rates where OTR fees of R100 as part of the deferred amount would amount to about R700 financed over 72 months.
Despite all the arguments and analysis over the years about OTR fees, the judgment therefore comes to the not surprising conclusion that the dealer and the consumer can agree on accessories and services including OTR fees as part of the purchase price and principal debt as long as what is charged does not contravene section 102.
The court held that the items listed in section 102(1) form a closed list. Section 100 prohibits credit providers from charging an amount or imposing a monetary liability on consumers in respect of fees or charges prohibited by the Act. Section 101(1) read with section 102(1) contains the closed list of permissible charges. These do not include separate OTR fees included as part of the purchase price agreed to by the consumer.
Credit providers have a responsibility to ensure that its credit agreement with the consumer complies with the Act and may not close its eyes to the contents of the agreement between the dealer and the consumer. The charges in section 102(1)(a) to (f) are typical charges associated with the cost of credit imposed on a consumer and “similar charges” are prohibited. The principal amount and therefore the amount deferred includes the price of the vehicle and any other charges that could reasonably be regarded as part of the price including optional accessories and services and everything reasonably related to the goods sold. The term ‘principal debt’ must be given a broad definition of items reasonably related to the purchase price, thus including OTR fees.
The court said that what was stated in the judgment regarding the meaning of sections 100(1), 101(1) and 102(1) affect only future cases. The court declined to scrutinise past individual credit agreements to determine whether there was a breach of section 102.