WE KNOW WHAT IT FEELS LIKE TO BE IN A CASH FLOW CRISIS

Consumers to think twice about instant cash-flow solutions

Media Release - Cape Town, 11 February 2021

South African consumers and businesses should be mindful of pitfalls that put them in a worse financial position when taking cash flow relief deals, particularly when it involves using their vehicle/s as collateral.

Despite the fact that Level-3 Lockdown restrictions have been eased recently, it is very likely that many consumers still find themselves in a post-holiday financial hangover and/or are facing difficult times financially for the next few months.

In this case, the list of options for instant cash flow relief include bank loans, payday loans, pawn loans or dangerous “pawn your car and still drive it” schemes.

The first two options may not be available to everyone, and as such people tend to consider the third, where the only requirement is ownership of an asset.

The fourth option, “pawn your car and still drive it”, despite being illegal in South Africa, is commonly found, but consumers should be aware of the following pitfalls when considering this option:

  1. By its very nature, the concept of pawning a vehicle, requires it to be kept in safe storage until the loan is paid back in full, within an agreed upon time frame. So, driving the car while it has been pawned is in fact illegal.
  2. The pawn loan amount offered is usually a fraction of the trade value of the car.
  3. The additional fees and interest charged on these transactions are so high (in some cases more than 40% PER MONTH!), that the consumer cannot reasonably afford the repayments.
  4. The fees and interest charged usually exceed the limits provided in law and are therefore illegal.
  5. Eventually it becomes impossible for the customer to keep servicing the loan and they default, resulting in the vehicle being repossessed.
  1. The default results in the vehicle/s being sold by the pawn provider at a massive profit, leaving the customer with nothing.

Start the process now > click here.

There is however a lawful, fair and safe alternative solution that is now available to consumers and businesses. Drive Away SA has developed a short-term cash flow solution that helps consumers and businesses unlock the cash value of the vehicle/s they own, while still keeping them in the driver’s seat. The process is simple, transparent and safe.

Here’s how it works:

  1. Drive Away SA facilitate the purchase of your vehicle/s for cash.
  2. You keep driving it for a manageable monthly rental fee.
  3. When you’re ready, you can buy the vehicle/s back, for the same amount it was originally purchase for.

With no credit checks and no ridiculous interest rates, consumers and businesses can now use the vehicle/s they own to bring some much-needed cash flow relief. 

“We don’t profess to have the cash flow solution for every consumer or business, but we believe that in these difficult times, we can provide our customers with short-term relief from the financial pressures and stresses they are experiencing.   We caution consumers and businesses alike to be wary of unscrupulous loan and pawn practises and to make informed decisions when it comes to addressing their short-term financial requirements,” said Mayran Spiro, owner of Drive Away SA.

How it works

Complete a 
No Obligation
 Application
Get 
Your Numbers
Vehicle 
Assessment
 & Roadworthy
Agreement & 
Lump Sum
 Payment
Carry on 
Driving your car
 & decide on when to buy it back

So I basically loan money from you using my car as security?

You will be provided with an indicative maximum and minimum cash purchase offer that is based on the current market value of your vehicle. Depending on your cash flow needs, you choose any purchase amount between the indicative maximum and minimum cash purchase offer. A final cash purchase offer will be made once the vehicle has been inspected and the roadworthy condition has been assessed.

There is also an origination fee of R2,500 which is payable by you to the buyer up front, and this is deducted off the purchase price so will not affect your cash flow.

What requirements do I have to meet to do this?

You will be provided with an indicative maximum and minimum cash purchase offer that is based on the current market value of your vehicle. Depending on your cash flow needs, you choose any purchase amount between the indicative maximum and minimum cash purchase offer. A final cash purchase offer will be made once the vehicle has been inspected and the roadworthy condition has been assessed.

There is also an origination fee of R2,500 which is payable by you to the buyer up front, and this is deducted off the purchase price so will not affect your cash flow.

So what sort of price would I get for my car?

Assuming that the vehicle is in a roadworthy condition, you could expect to get the market value (in other words, the value that your car would sell for on the open market) of your vehicle.

The price would be adjusted to:
- settle any outstanding fines on the vehicle; and
- undertake any repairs which might be necessary to make the vehicle roadworthy.

There is also an origination fee of R2,500 which is payable by you to the buyer upfront, and this is usually just deducted off the purchase price.

Yes, but then what amount could I expect to pay to rent my vehicle back from you?

Our rentals are generally cheaper than if you were to rent a vehicle from a rental company such as Avis or Europcar.

The rentals are generally calculated taking into account the type of vehicle, the age of the vehicle, mileage and the book value of the vehicle.

The rental amount will also include:
- insurance on the vehicle
- tracking costs (the vehicle will be fitted with a tracking device)

We would quote you a rental amount before you sign any documents to ensure that you are happy with all of the elements of the sale and/or the rental.

We will give you at least one month’s notice of any increase to the monthly rental amount, and this will not happen more than once a year.

Are there any other hidden costs which I should know about?

Well, you will have to pay all e-tolls, fines, traffic infringements or other penalties charged while you rent the vehicle, and you will also have to pay the insurance excess if the vehicle is involved in an accident while you are renting it.

Any costs of operating the vehicle are also for your account – such as fuel, oil, tyres, etc. for the period that you rent the vehicle.

Administration fees can be levied by us if a payment bounces or if we have to make any payments or do any of the things that you are responsible for under the rental agreement (such as pay your speeding fines, etc.)

These amounts are obviously not included in your monthly rental amount and are therefore payable by you as and when they arise.

If you default under the rental agreement, you will also be liable for our legal costs to enforce the agreement.

How long will I need to rent the vehicle for?

The rental runs on a month-to-month basis, and you are not tied into any minimum period.

At the end of each month, you can either return the vehicle to us or rent the vehicle for another month by paying the rental for the next month to us.

If I want to buy my vehicle back at the end of the rental period, what could I expect to pay for the vehicle?

The vehicle price will again depend on the market value of the vehicle at that time, the condition of the vehicle, the age of the vehicle, etc. You could expect the vehicle to be sold back to you at as close to the market value of the vehicle as possible. The vehicle purchase price will be clearly indicated on the contract.

What happens if I decide not to buy my rental vehicle at the end of the rental period?

The vehicle can either be rented by us to another party, or it can be sold by the buyer to a third party. 

So how quickly can this all happen?

Typically within 24-48 hours from the time you bring your vehicle to us for the inspection.

If repairs are required to bring the car up to roadworthy standards, a repair consent form will need to be signed in addition to the offer to purchase and lease agreement. The purchase price will be transferred to you and as soon as the vehicle repairs are completed and the lease amount is paid by you, you can DriveAway.

Start the process now > click here.

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