22 Oct How To Buy a Car While Under Debt Review
Your path to restoring financial stability through debt review is unique to you. It is a personal journey shaped by your financial situation and your ability to manage your repayment plan successfully. While under debt review, you cannot apply for new credit — a necessary restriction enforced by the National Credit Act (NCA) to protect you from taking on additional debt while repaying your existing obligations. So, you might be wondering how to buy a car while under debt review.
When it comes to maximising your financial freedom through debt review, it helps to know what you can and cannot do during the process. Nothing is stopping you from making cash purchases during the process, as long as you keep the bigger picture in mind and it suits your budget. You can also enter into certain lease or rent-to-own arrangements, as long as they comply with the NCA and don’t require you to take on additional debt.
Buying a Car Cash
This is by far the most straightforward approach when considering how to buy a car while under debt review. Of course, a vehicle can be a costly investment, especially when you are on a tight budget. It might involve saving some money each month towards the purchase, so that you can afford a car that suits your requirements. Don’t forget the importance of maintenance, budgeting for petrol, and of course, insurance.
How will this work? You can make a cash purchase through a private seller or a car dealership. If you are buying privately, we recommend conducting a vehicle history check and ensuring the car is roadworthy before finalising your purchase. When you buy a car for cash while under debt review, you will pay for it outright, without financing. Once the vehicle is registered in your name, it becomes your car by law.
Explore Leasing/Rent-to-Own
Some companies in South Africa offer car leasing or rent-to-own options, which do not involve financing in the traditional sense. Instead, you pay a fixed monthly fee to use the vehicle. You can also enter into an agreement that allows you to take ownership of the vehicle after the repayment period. Note that not all companies will allow you to enter into these agreements while under debt review, and that you will need to provide proof of income to qualify. Debt review offers a legal way to cut your debt repayments, and you should be cautious of any financial commitments that could hinder your progress.
If you are asking “can I buy a car under debt review?”, you can as long as it is not with credit. Our advice? Always read the fine print carefully to ensure that the agreement aligns with the National Credit Act (NCA). If you are uncertain, let your debt counsellor step in and assist. Our Limdebt team are here to lighten the burdens of debt in your life, through a transparent debt review service. CONTACT US today to get started.