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

Video: When to consider debt counselling

Even before lockdown, many people were finding it difficult to meet their debt repayments and facing the prospect of defaulting. Once you are in default, the collection and legal fees start mounting up. Debt that you were already struggling to repay could easily...

How does my access bond work?

If you are confused about the effects of depositing extra funds into your home loan, you are not alone. During lockdown, many people looked into their finance agreements, which resulted in a lot of queries about what happens when you pay an additional amount into a...

Listen: How to pay off your home and car

If you are confused about how advance payments work when it comes to your home loan and car finance, you are not alone. In this podcast, Maya (@mayaonmoney) and Mapalo (@womanandfinance) unpack exactly how access bonds work and when advance payments on your car can be...

Monitor those payment holidays

We have received several complaints from readers who have been unhappy with the management of their payment holidays. Many bank customers believe they were not fully informed about the consequences of taking a payment holiday or in some cases were granted a payment...

Video: Make interest-rate cuts work for you

When we began 2020, who could have imagined that mortgage rates would fall by almost one-third, decreasing from 10% all the way down to 7% percent. Economists are even predicting further rate cuts this year. While this has been great news for borrowers, it has not...

Could technology revive the lay-by market?

I remember as a teenager buying on lay-by. Jet stores had a red and orange jersey that I had fallen in love with.  I didn’t have the money to buy it, and in those days store cards were uncommon ‒ and certainly not available to a teenager. I bought the jersey on lay-by...

Stay on top of your repayments

Most agreements to suspend debt repayments or monthly premiums have come to an end. Make sure you understand how this will affect your finances. In the initial stages of lockdown, most banks, insurers and retirement product providers offered installment or premium...

Video: Create a debt repayment plan

We often believe that the only way to pay off debt is with a windfall like a big bonus or winning the lotto. But this thinking gets us caught in an anti-wealth trap. We spend on our credit cards all year and use our bonus or 13th cheque to settle the debt, only to...

Listen: Know the difference between good, bad and ugly credit

Is there such a thing as good credit? What forms of credit should you avoid at all cost? In this podcast, Maya (@mayaonmoney) and Mapalo (@womanandfinance) discuss the good and dark side of credit and whether the concept of the lay-by will come back into fashion as...

Borrowing from days already worked

A salary advance could be an attractive alternative to a traditional payday loan. A few years ago, I came across an article about how Walmart in the US allowed its workers to access a portion of their already-earned salary before month end. For example, if you have...

Pin It on Pinterest

Share This