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:
- 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.
- The pawn loan amount offered is usually a fraction of the trade value of the car.
- 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.
- The fees and interest charged usually exceed the limits provided in law and are therefore illegal.
- Eventually it becomes impossible for the customer to keep servicing the loan and they default, resulting in the vehicle being repossessed.
- The default results in the vehicle/s being sold by the pawn provider at a massive profit, leaving the customer with nothing.
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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:
- Drive Away SA facilitate the purchase of your vehicle/s for cash.
- You keep driving it for a manageable monthly rental fee.
- 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.