How the deal worked
Anyone who qualified, could drive a new car from R699 a month (depending on the model and the contract signed). The Satinsky group (acting as a motor dealership), arranged finance for the car through South African banks, and subsidised the monthly repayments through an advertising contract with Hong Kong based Blue Lakes Trading and Promotions.
The customer drove the car with a sticker covering the back window featuring a unique advertising code. If a car was sold via your unique code, you received a cash payment.
Clients were also compensated – on a sliding scale – for the kilometres they drove (therefore exposing the car advert to the public), with the advertising fee calculated as a percentage of the repayment amount for the car.
But according to communications sent to clients, Satinsky has cut ties to Blue Lake, cancelling this arrangement and leaving thousands of customers having to meet a full monthly car repayment, without the advertising revenue they had been using to supplement their car repayments.
Satinsky released a statement saying: â??Following recent communication, we confirm that after lengthy discussions with Blue Lakes Trading and Promotions, it is our opinion that the interest of Satinsky clients will best be served by dissolving the management agreement between ourselves and Blue Lakes Trading and Promotions.â?
Offer to extend car payment terms
This week the company reportedly began offering customers an option to arrange for their payment term to be extended in order to lower their monthly car repayments.
Satinsky has also distanced itself from Blue Lakeâ??s contractual responsibilities regarding payments, claiming that Blue Lakes Trading and Promotions is a separate company with no ties to Satinsky. â??The Satinsky Group of companies is not responsible for any payments to clients who purchased vehicles from ourselves.â?
According to Satinsky, when customers purchase vehicles from its group of companies (which includes Drive Car Sales and Just Group Africa), they enter into two separate transactions:
1. A vehicle finance agreement with the bank, in which they are responsible for the full monthly payment.
2. An advertising agreement with a third party (Blue Lakes Trading and Promotions), in which they become service providers to the principal, Blue Lakes Trading and Promotions.
According to IOL, the group could not be reached for further comment.