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.
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.
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.