With the rising prices of vehicles these days car finance is popular in South Africa. But what if you have a bad credit record? This can be more challenging as the major banks will not be able to help.
Here we take a look at your options to borrow money to finance a car even if you have a bad credit record and are struggling everywhere else.
You can get car finance for bad credit scores in South Africa with options including:
- Car dealerships that accept bad credit
- Bank declined car finance
- Blacklisted vehicle finance with same day approval
- Inhouse vehicle finance for blacklisted with no deposit
With bad credit car finance you don’t have to stress about your previous credit record stopping you from buying a car. Even if you’ve gone bankrupt in the past and you’re rebuilding your credit record.
Or maybe you simply fell behind on a few bill payments. You can still get car finance approval for a bad credit record in South Africa.
So let’s take the list above and break down your vehicle finance options.
Car Dealerships that Accept Bad Credit
The following car dealerships in South Africa accept bad credit scores and offer loans to buy a vehicle:
- Earnacar – Only in the Gauteng and Witbank area
- No Finance Cars
- MAS Financial Services
- Excelsior Loans
- DealFin Virtual Finance
So you can still be eligible for car finance at Car dealerships in South Africa even with very bad credit. You will always be offered the best rates of approval at a car dealer according to your personal financial circumstances.
Sales consultants at the dealerships have experience in helping people that suffer from bad credit issues but need car finance.
Bank Declined Car Finance
If a bank declined car finance for you in South Africa it could be for one of the following reasons:
- You have no credit history because maybe you always paid cash
- Your name is associated with another person that has bad credit
- Repayments have not been paid regularly meaning your account has defaulted
- You made some poor financial decisions in the past which led to you borrowing more than you could afford
Just because the bank declined car finance it doesn’t mean anything except you need to apply with an alternative creditor.
You may have been declined car finance from one of the following banks because of bad credit:
- ABSA Bank
- Capitec Bank
- Standard Bank
- Nedbank
- African Bank
- FNB
Other credit providers are not operating under such strict rules. Therefore they may be more lenient with lending money to people who want a new car.
The Pros of Car Finance for Bad Credit in South Africa are:
- Finance is easy and quick to arrange
- Fixed monthly payments
- Flexible terms up to 60 months
- Interest rates can be fixed
- You own the car after the final payment
- There are no restrictions on annual mileage
Once you finish paying off your car finance providing you keep up with payments you will no longer have a bad credit record.
This puts you in a good position for borrowing vehicle finance in the future or for other types of loans.
The Cons of Car Finance for Bad Credit in South Africa are:
- Vehicle loans aren’t guaranteed but subject to your personal credit status
- You have to keep up payments even if your financial circumstances change
- If you miss payments you may face car repossession
- The vehicle only becomes yours after the final payment of the loan
- Interest rates aren’t always in your favour
You may be able to negotiate the interest rates with a car dealer it will depend on how bad your credit record is.
If your credit record is very bad then you will be seen as a higher risk to loan money to. The better your financial history, the more chance you have to negotiate lower interest rates.
In South Africa it is wise to shop around to compare the lowest interest rates on loans for a vehicle.
Even with a poor credit history you still have some options to negotiate rates with some car dealerships.
Blacklisted Vehicle Finance with Same Day Approval
Getting blacklisted vehicle finance with same day approval in South Africa is difficult.
This is due to the fact that it can take more than 24 hours to check an applicants documents and credit history.
It is possible to get approval for vehicle finance quickly if you are blacklisted. Although you are going to have to find a very helpful credit provider or car dealer.
This information may interest you: Get Blacklisted Car Finance at Vehicle Loan Providers
The best kind of car finance for blacklisted people in South Africa is “Rent to Own”.
Advantages of buying a car through a rent to own scheme are:
- You can buy a car if you’re blacklisted
- No need to rely on a bank loan
- After the rental payment period the vehicle is yours
- You don’t have to search to find a car dealership for bad credit car loans
- Repayments are fixed
- There’s no limit on mileage
So although you may not get same day approval on blacklisted vehicle finance, this is a good alternative solution.
You can check out more information on this website.
Inhouse Vehicle Finance for Blacklisted with no Deposit
People ask this a lot so we’re touching on it briefly.
To find inhouse vehicle finance for blacklisted people in SA with no deposit is almost not possible.
Because you are asking for a lot:
- Firstly you are blacklisted
- Secondly you have no deposit
- Thirdly your credit record is bad
- Lastly vehicle finance creditors will see you as a very high risk
Therefore you can understand why a car dealership will hesitate to offer inhouse vehicle finance for blacklisted people with no deposit.
Should you have some kind of deposit to put down however, you have a better chance of borrowing.
A better option would be to look into the rent to own car finance we spoke about above.
In Conlusion
Most of us need a car to get around in South Africa. Not everyone is doing that well financially.
So many people are getting blacklisted and a bad credit history.
But these financial problems don’t stop you from borrowing money to buy a new vehicle.
The loan solutions above will help you get car finance for bad credit in South Africa. Therefore do a little digging and you will soon be driving the new car you want.
More information on applying for finance here: Bad Credit Car Finance Applications