2024-11-01
Having your own car gives you a great sense of freedom and ability to be in charge of your own life. Being able to own a car, though, can be much easier said than done. Vehicle financing is always an option if you can't afford to buy a car in cash, but there are certain requirements for you to qualify for financing. Aside from proof of income and several other documents to verify your background information, you will also need to have a credit history for the financing provider to check. The reason for this is that they want proof that you are capable of paying back your credit and have a history of paying your instalments on time.
Having your own car gives you a great sense of freedom and ability to be in charge of your own life. Being able to own a car, though, can be much easier said than done. Vehicle financing is always an option if you can't afford to buy a car in cash, but there are certain requirements for you to qualify for financing. Aside from proof of income and several other documents to verify your background information, you will also need to have a credit history for the financing provider to check. The reason for this is that they want proof that you are capable of paying back your credit and have a history of paying your instalments on time.
Not everyone has a credit history, though, especially if you're still young and only just starting out in life. So what are your vehicle finance options in South Africa? Fortunately, you won't necessarily have to wait until you've built up a solid credit history over months or years before you can get behind the wheel of that used car you want to have. Read on to discover what other alternatives may be available to help you drive off into the sunset, so to speak.
Ask A Trusted Person To Take Ownership Of The Finance Plan
Whether it's a parent, other family member, friend or even a trusted employer or mentor, maybe you know of someone who you can entrust a big decision like this to and who are more likely to qualify for financial credit approval. For this to work, you will need to arrange an agreement or set up a contract specifying that you will pay them the monthly instalments that they owe the credit provider on your behalf. If you do decide to go in this direction, be sure that you can definitely afford to pay the instalments and take the arrangement as seriously as you would if it was with a bank or other official financial provider. You wouldn't want to ruin a relationship by leaving them drowning in debt because of you, after all.
Save Up
If possible, start saving until you have enough money to put down a large upfront deposit on the car you want. If there's a smaller amount left owed after you've provided a cash deposit, you're more likely to get financing or secure a small loan from a friend or small loans provider to pay the rest of the car off. There are several short term credit providers who offer microloans, which are less risky and can be paid off in a shorter period of time. These types of credit providers do charge a much higher interest rate on the amount loaned, so be sure to read the fine print and know exactly how much more you'll end up paying them for the loan.
Rent To Buy
If you can't secure financing or a loan, there is a third option to consider. Leasing or renting to buy is another way of having a car and being able to build up a credit history at the same time. While there are still qualifying criteria to meet in order to lease a car, you may be considered as a likely candidate because you're essentially renting a car, month by month, until you own it.
Before that happens, it stays the property of the company leasing it to you, which means they will have less risk taking you on as a client than a financial credit provider would have on the long term. Should you not be able to afford the lease, you can end the contract at no huge loss to the company. Be aware that you will have to pay in a percentage of the total remaining amount owed, though.
We hope these tips will aid you in getting that used car you've been dreaming of, whether through vehicle financing in South Africa, or by alternate means. Good luck and happy driving!
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