Can’t Afford Car Payment? Here Are Your Options in South Africa

Cant afford car payment what are my options in south Africa?

If you find yourself unable to afford your car payment in South Africa, it’s important to act quickly to avoid serious financial repercussions. Here are specific options and steps you can take to manage the situation effectively.

1. Contact Your Lender Immediately

As soon as you realize you can’t make your car payment, contact your lender. Explain your financial situation and ask if they offer any hardship programs. Lenders may provide temporary relief options, such as:

  • Payment Holiday: A temporary suspension of payments for a short period.
  • Reduced Payments: Lowering the monthly payment amount for a specified period.

Example: If your monthly payment is R3,000, the lender might agree to reduce it to R1,500 for six months.

2. Renegotiate the Loan Terms

Request to renegotiate the terms of your loan to make the payments more affordable. ABSA bank is known for this. Options include:

  • Extending the Loan Term: Increasing the duration of the loan to reduce monthly payments. Note that this may result in paying more interest over the life of the loan.
  • Refinancing: Taking out a new loan with a lower interest rate or longer term to replace the existing one.

Example: Extending a 60-month loan to 72 months can lower monthly payments from R3,000 to R2,500, but you’ll pay more interest overall.

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3. Voluntary Surrender of the Vehicle

If renegotiation isn’t possible, consider voluntarily surrendering the vehicle. This involves returning the car to the lender and can sometimes result in a more favorable outcome than repossession.

  • Process: Contact your lender and inform them you wish to surrender the vehicle. Arrange for the return of the car.
  • Impact: This will affect your credit score, but it might be less damaging than a forced repossession. You’ll still be responsible for any shortfall if the car’s sale doesn’t cover the remaining loan balance.

Example: If you owe R100,000 and the car is sold for R80,000, you’ll need to pay the remaining R20,000.

4. Debt Review

If your financial difficulties are not limited to your car payment and you’re struggling with multiple debts, consider applying for debt review under the National Credit Act. A registered debt counselor will:

  • Assess your overall financial situation.
  • Negotiate with creditors to restructure your debts into a more manageable payment plan.

During debt review, creditors cannot take legal action against you.

Example: A debt counselor might consolidate your car loan with other debts, reducing your total monthly payments from R10,000 to R6,000.

5. Selling the Vehicle

Selling your car privately or to a dealership can be an effective way to avoid defaulting on payments. If the sale price covers the outstanding loan, you can pay off the debt and avoid further financial trouble.

  • Private Sale: Typically fetches a higher price than selling to a dealership. Ensure all paperwork is in order and the lender is informed.
  • Dealership Sale: Usually quicker but may result in a lower sale price.
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Example: If your outstanding loan is R80,000 and you sell the car for R85,000, you can pay off the loan and keep the R5,000 balance.

6. Consider a Trade-In

Trading in your current vehicle for a cheaper model can lower your monthly payments. Ensure the trade-in value is sufficient to cover the outstanding loan balance or that the new loan terms are manageable.

Example: Trade in a car with a R3,000 monthly payment for a smaller car with a R1,500 monthly payment.

Important Legal Considerations

  • National Credit Act: Protects consumers by ensuring fair treatment and the right to apply for debt review.
  • Credit Agreements Act: Governs the terms of credit agreements and the process for repossession and voluntary surrender.


If you can’t afford your car payment, acting quickly and knowing your options can help mitigate the financial impact. Whether it’s renegotiating the loan, voluntary surrender, debt review, selling the vehicle, or considering a trade-in, there are actionable steps to manage the situation. Always communicate with your lender and seek professional advice when needed.