What Happens if You Miss One Car Payment in South Africa?

What Happens if You Miss One Car Payment in South Africa?

If you miss one car payment in South Africa, here’s what you can expect to happen:

1. Reminder from Lender: Your lender will contact you to remind you of the missed payment and urge you to catch up as soon as possible.
2. Late Fees: The lender may charge you a late fee, adding to your financial burden.
3. Credit Impact: If the payment remains unpaid, the lender will report the late payment to credit bureaus, negatively affecting your credit score.
4. Ongoing Delinquency: Continued missed payments can lead to the lender taking legal action. This includes potentially repossessing your car after a few missed payments if you fail to make the required payments or arrangements.

Key Stats:

• A third of South Africans with credit are struggling to repay their debts, which amounts to 10-million people.
• In 2023, out of 27-million South Africans with credit, 10-million are three months or more behind in debt repayments or facing legal action.

Take Immediate Action: If you miss a payment, contact your lender right away to discuss your options and avoid further consequences.

Details on What Happens if You Miss One Car Payment in South Africa

Do you know that it is very common for people to miss a car payment in South Africa? But don’t worry, missing your car payment isn’t the end of the world. Let’s talk about what happens from a legal perspective and throw in some interesting stats.

Firstly, if you miss one car payment, your lender will likely contact you to remind you of the missed payment and encourage you to catch up as soon as possible. It’s important to act quickly because ignoring the problem can lead to more severe consequences.

If you don’t make up the missed payment within a reasonable time frame, the lender might charge you a late fee, which can add to your financial burden. If the payment is still not made, the lender may start to report your late payment to the credit bureaus. This could negatively impact your credit score, making it harder for you to get credit in the future.

Now, if you continue to miss payments, things can get serious. After a few missed payments, the lender has the legal right to repossess the car. They must follow specific legal procedures to do this, but essentially, they can take your car back if you don’t keep up with your payments.

Here’s a staggering fact: a third of the people in South Africa with credit are struggling to repay their debts. That’s 10-million people who are three months or more behind in debt repayments or facing legal action, according to Credit Bureau Monitor data for September 2023. That’s 10-million out of the 27-million South Africans with credit.

The situation has gotten worse over the years. Part of the increase is certainly due to the fact that many more people in South Africa have access to credit today than they did previously. For example, in 2007, 16.8-million people had credit and 6-million were behind in repayments. That’s nearly 36%, marginally lower than today’s ratio of 37%.

So, while it’s not uncommon to struggle with car payments, it’s crucial to communicate with your lender. Many lenders are willing to work out a solution, such as a revised payment plan or even a temporary reduction in payments. Ignoring the problem can lead to serious financial and legal trouble.

But why don’t people just buy cars they can afford?

It’s not always that simple. Sometimes, people’s financial situations change unexpectedly, like losing a job or facing medical emergencies. Other times, it’s about the lack of financial literacy or the temptation to buy a car that meets their aspirations rather than their budget.

Remember, if you find yourself missing a payment, take action immediately. Contact your lender, explain your situation, and explore the options available to you. It’s better to address the issue head-on than to let it escalate.