PRETORIA – We’ve probably all seen it. The entry-level vehicle in front of you on the highway with the ad on the back window proclaiming that you too can own a new car for only R499 per month. No deposit. No residual.
The offer is brought by Just Group Africa from holding company Satinsky 128. Just Group, which gives a Financial Services Board approval number, works through Drive Car Sales and also has an international partner in Blue Lakes Trading and Promotions, a Hong-Kong based vehicle sales promotions company.
A video on the local Blue Lakes website puts the offer to clients: If you are “dreaming of freedom” and don’t want to “queue for public transport” anymore you can use these cheap deals to own your own car and make money while you’re at it. The Own while you Earn or Drive while you Earn option gives you money back by using the back of your car as a “moveable billboard” – the word used to describe the concept by CEO Albert Venter. In the Own while you Earn option you use your new car as advertising platform for Blue Lakes and its partners and if you drive 500km a month, you get R570 back. If anyone uses the unique code on your car to SMS for information and eventually buys a car, you get R3 000. A testimonial on the video uses the example of a student who earned R48 000 in this way. The Drive while you Earn option asks you to drive 2000km per month to also get some money back. Every month you need to submit two date stamped photos to the site with your odometer reading and the back of your vehicle.
Sounds like a novel concept and good way to buy your first vehicle, but complaints on the site hellopeter.com and previous reports on the company have highlighted some concerns and challenges.
In a recent complaint on hellopeter.com a customer complains that the contract he signed had “no similarity” to the company’s advertising. He complains that the advertising for monthly instalments is at prime plus 0% interest, but that everyone will obviously pay interest so the amount will be more. In 2009 the Advertising Standards Authority investigated a complaint lodged against the company and found that the advertising was misleading.
“That was a misconception. The ASA later said that the advertisement was correct. In fact, we approached the National Credit Regulator before we used the advertisement and they were ok with it. I can show you the communication,” Venter told Moneyweb.
Moneyweb has asked for the proof to be sent through.
He said that the structure of the advertising and financing deals are discussed at great length with any customers. “Transparency is important for me. The offers for the advertising is put to the customer when he buys the car and when it is delivered,” Venter said. He said that the company complies with the National Credit Act and walks the customer through the contract thoroughly.
Currently about 8 000 cars on South Africa’s roads were purchased in this way. Venter said that only about 875 of those still use the Drive while you Earn option, while the rest are all on the Earn while you Own option.
In answer to the complaints on the company’s Facebook page and on hellopeter.com Venter said there would always be some customers who are unhappy and that the company does not reply on hellopeter as it believes it has a efficient help desk. The company has 180 staff members and he believes that they have the capacity to deal with all complaints, but does admit that sometimes people will be unhappy.
“We watch customer satisfaction a lot through our interactions with customers. All complaints have to be resolved within 24 hours. Customer satisfaction is at 92% at the moment,” he told Moneyweb.
For Just Group on hellopeter there are 43 complaints and seven compliments. For Satinsky Group of Companies there are 35 complaints. For drive car sales there are seven complaints and one compliment. The complaints range from not receiving the correct amount for the advertising to calls being dropped to difficulty reaching the company for service and help. Also mentioned are problems with loading photos on to the system. On the Blue Lakes website the company warns that if it needs to assist customers with the loading or viewing of photos an administration fee of R750 will be charged, which will be levied against the advertising fee.
Some of those who left compliments indicate that the scheme does work for them. One customer said he has earned R12 000 in one month through the Earn while you Own option. Another says that the feedback system on the Blue Lakes website works well. One compliment says that the owner of the car has had the vehicle for 14 months and the company has never missed a payment. This specific customer does however indicate that it is better to drive to the company’s premises than to try and contact them telephonically or online.
Moneyweb also struggled to get a telephone number to contact the company and Venter. After various searches a number for the drive car sales call centre was found. Venter then contacted Moneyweb to answer any questions and mentioned that he had undergone surgery thus the reason for him being out of the office. When asked about the difficulty in contacting the company Venter said it is trying to encourage clients to use SMS and online communication to try and manage the volumes of interactions.
“Just through our call centres we generate about 80 000 leads a month and we have about 88 000 interactions with our clients also in a month,” he said. Currently the company is selling more than 600 cars a month. If all of them were on the Earn while you Own option that means R1.8m should be paid out every month. According to Venter, this is about 2% of the company’s monthly turnover and below industry standards for advertising spend. This puts monthly turnover at around R90m.
Two years ago Just Group indicated that it might consider a listing on the London Stock Exchange to raise capital to expand. Venter said that the economic conditions were not conducive and the company is currently focusing on South Africa and exploring possibilities in China with its connection with Blue Lakes Trading.
Venter told Moneyweb that the quality of its book is exceptional with arrears being almost non-existent.
He said that the clients the company attracts for co-branding shows that it is reputable, stating that it has a campaign running with Hollard and MiWay for example.
Venter said that there will be complaints and problems, but he believes that the levels of satisfaction are high. He said that the company has been taken to the National Credit Regulator and challenged with the Consumer Protection Act, but the matters were resolved and was found in favour of Just Group.