A vehicle has become a modern day necessity for most of us, and a source of pride, an indication of hard work and social status and having that taken away can not only leave you in financial ruin but also affect you psychologically. The sad reality is with the tough economic vehicle repossession is not as uncommon as you may think with hundreds of South Africans losing their cars every month.
Are you in danger of losing your vehicle
Purchasing a car is a long term commitment for many and no one can predict what will happen during the course of that period and your finances might not always be as rosy as they once were when your vehicle finance was approved.
If you fear that you won’t be able to keep up your car payments, one of your options are selling your car before you miss any loan payments and use the proceeds to pay off your car loan. Your goal is to sell it for more than your outstanding loan balance so you have some cash to buy a used vehicle – in the best case scenario.
The reality of selling your car
Here’s a more realistic situation: You probably owe more on your vehicle than what it’s worth. Unless you can come up with the difference between what your car sells for and what you still owe on it, the lender won’t give you title to the vehicle, which means you can’t complete the sale.
Another option is to get someone to take over the payments on your car assuming that your loan agreement allows it and the lender Okays it. In this situation, the other person takes your car and starts making the loan payments.
The lender probably won’t remove you from the loan paperwork, so even though you no longer have the car, you are still liable for the loan. Even if a person takes over defaults on the loan, your credit history will also suffer. That’s why it’s very important to make sure you can trust the person who takes over your payments.
Selling your vehicle fast and for a good price:
Fortunately, it’s not all doom and gloom and there are ways to move on your vehicle and not end up in the red. To ensure that you’re in the black and end up with more money in your pocket you will have to sell your car to an individual buyer rather than a used car dealer.
Follow this advice to get your car sold quickly and for a good price:
- Compshopping is key: Price your car fairly. Research your car’s national market value and look around at ads for similar cars for sale, to make sure you set a fair price on your car.
- Take care of your inexpensive repairs before you put your car on the market. Be prepared to share your repair and maintenance records with potential buyers so that they know you have taken good care of the car.
- Clean your car inside and out before you show it to prospective buyers.
Let your friends and relatives know that you’re selling your car, word of mouth advertising is definitely not overrated.
- Make sure your car is roadworthy: Every vehicle must pass a roadworthy test before being licensed. Provide your vehicle’s roadworthy certificate to potential buyers. You’ll need to hand over the original registration papers. If the vehicle is still being paid off, you will need to arrange for the papers with your bank. Also, check that there are no outstanding fines attached to the vehicle and pay them./li>
- If you have any extras like a canopy, radio, set of rims or tyres, comp shop the value of the add on and add it to your overall selling price
- Advertise in your local newspaper classifieds section and/or on the Web, using popular online classified platforms for free like olx.co.za and www.gumtree.co.za.
- Be honest: It’s important that you disclose the full condition of the car, including its service history and any accidents that it may have been in. With the new consumer protection act (CPA) in place, there is no room for sneaky or sloppy sellers in South Africa.
Don’t let debt take your car
If you’re feeling overwhelmed by your current financial situation, feel free to contact us. To Speak to one our consultants about debt review contact us here.