You are Here > Home > My Car > Struggling with car debt? Take action now!

Struggling with car debt? Take action now!

Aug 23, 2021

Struggling with car debt? Take action now.According to the Experian Consumer Default Index, repayment of car debt has shown a marked deterioration as the extended Covid-19 lockdown puts South Africans under more financial pressure.

Marc Friedman, CEO of car sale platform Weelee.co.za says that to avoid a repossession, cash-strapped vehicle owners need to react promptly.

“If you think that you might struggle with fulfilling your car instalment obligations, be proactive and start making a plan now.”

Weelee.co.za provides the following tips for car owners who are struggling with their car debt.

Put all your cards on the table

Compile a detailed budget with an accurate reflection of your income and expenses. Be realistic about whether you can afford your car’s repayments, running costs, maintenance costs and insurance.

Be as lean as possible

In addition to trimming items on your household budget, try to make your current car more affordable.

Examples include shopping around for a good RMI-accredited provider to service your car professionally, but more affordably, with OEM parts; buying more affordable, but still good-quality tyres; and making sure you use all the benefits offered by your maintenance plan and other value-added services.

Consider all plans

If you are in good standing with your financial services provider, try to negotiate different terms, such as extending your loan duration to reduce repayments. This may incur more interest, but you’ll be able to keep your car.

If you’ve been retrenched, consider using your credit insurance or income protection plan, if you have one, to carry you through times of crisis.

Sell it now, buy something better later

Sell your car and scale down to alleviate the financial pressure, saving any surplus for a future deposit or using it to settle other debts.

Don’t accept the first offer

Be savvy when selling your prized possession. Research the going rate for your car properly. Don’t simply settle for the first offer, and make sure you get maximum cash for your wheels.

Consolidate multi-car households

Consider letting go of one or multiple cars to either scale down on the number of vehicles, or to buy something more suited to your financial and lifestyle needs.

Be vigilant

There are many criminals, who often pose as buyers, ready to pounce on unsuspecting sellers. Only use screened, trusted dealers and properly secured platforms.

This article first appeared in City Press.

0 Comments

Submit a Comment

Your email address will not be published. Required fields are marked *

Maya Fisher-French author of Money Questions Answered

Previous Articles

Treasury says “no” to pension loan proposal

National Treasury has made it clear that it does not support any calls to allow members to borrow money from their pension funds. This was in response to a Private Member’s Bill to amend the Pension Funds Act. This Bill was put forward by DA MP Dr Dion George as a...

Tips for a successful used car purchase

Ernest North, co-founder of AI-driven insurtech Naked, looks at some of the steps to follow before committing to a used car purchase. Numbers from TransUnion show that South Africans financed around 79 000 used vehicles in the first three months of 2021, with lenders...

Video: The true cost of a fancy car

The decision on how much to spend when purchasing your car is possibly one of your most important financial decisions. In fact, banks say that the main reason they turn down home loan applications is due to affordability, and the main culprit is usually car finance....

When does it make sense to have a travel allowance?

If you are required to travel for work there are several ways to claim for this expense. You can receive a travel allowance or be provided with a company car. In the case of a travel allowance, the employer would normally pay a set amount, for example R5 000 a month....

Fancy new car or a fabulous retirement?

Khwezi Jackson, investment consultant at 10X Investments, explains how buying a fancy new car could sabotage your retirement funding. Seeing a headline, ‘Spending R10,000 per month on a new car’, got me thinking: Why would anyone spend that much money every month to...

Don’t ignore your credit providers

The Credit Ombud wants to remind consumers that there are ways to ease the woes that come with being unemployed while having debt, and you shouldn’t just ignore your credit providers. If you’ve just lost your job or have had your salary reduced due to the Covid-19...

Listen: Pros and cons of debt counselling

For many people COVID has had a major financial impact and some may be considering entering debt review. In this podcast Maya (@mayaonmoney) speaks to David O’Brien of debt counselling firm Meerkat to explain how debt counselling works and how to choose a good debt...

The best way to settle your car finance

Advance payments on car finance do not work the same as on your home loan, so it’s worth understanding how to make the most of it. Any debt that you pay off sooner than required will save you money on interest. However, you need to understand how advance payments work...

Listen: What you need to know about car finance

How does a balloon payment work? What questions should I ask my dealer? Can I settle my car finance early and what happens if I want to give my car back? Maya (@mayaonmoney) chats to vehicle financing expert Henry Botha of Absa Vehicle and Asset finance to answer...

Video: Loan scams

There has been an increase in loan scams as people become financially desperate and see a cheap loan as a way out of a financial crisis. My own inbox is flooded each day with emails from companies claiming to offer really cheap loans. Many of these emails use the...

Pin It on Pinterest

Share This