Datsun got in contact with us and provided us with some information on vehicle repossession and the steps we can take to prevent it from happening.
If a financial crisis like a job loss means that you will not be able to make your car repayments, there are some actions you can take to get you and your vehicle back on the road to financial stability.
“The worst thing you can do is put your head in the sand and hope that by some feat of magic the problem will disappear,” says Des Fenner, General Manager of Datsun South Africa. “Missing payments and ignoring calls from your bank could unfortunately result in your car being repossessed.”
Usually, you can foresee financial difficulty on the horizon, so don’t wait until you are falling behind on your repayments to take action. Cut expenses right away, try to earn more income and make keeping your payments up to date a priority. If you can weather the storm, you will come out better off on the other side.
Waiting for the inevitable to happen, rather than making an alternative plan, may cost you on many fronts. If your vehicle gets repossessed and there is a shortfall, you are liable for those costs. In other words, if the car was financed for the amount of R100 000, for example, and you still owe the bank R80 000, you will still have to pay R10 000 if it is repossessed and auctioned for R70 000. In addition, your credit record will be adversely affected, making it difficult to get additional finance for a new car until that debt is paid off and the negative listing is removed from your name at the credit bureau.
“There are strict guidelines in place for banks to follow when they repossess a vehicle. In fact, repossessing your car is the last thing they want to do, and a creditor cannot reclaim your car without going through the correct legal procedures,” Mr Fenner assures. “You will get an initial phone call to assess your situation. The bank may offer you a temporary reduction in instalment for a set period, or they may extend the duration of the contract to reduce your payments. If you accept this, then your credit record should stay intact. If, however, you decide to avoid phone calls, you will receive a series of letters. You will also be offered the opportunity to go into a debt counselling programme. If you still ignore the bank, they will start legal proceedings against you.”
You will eventually be summoned to court, and if you don’t appear the bank will get a judgment against you and seek remedy through repossession.
“Usually financial setbacks are temporary, so, if need be, you could ask your family to help tide you over the bad patch,” Mr Fenner suggests. “Alternatively, look at where you can cut costs. For instance, if your satellite TV costs you R700 per month, and your entertainment bill is an additional R500 per week, you will make a big dent in your car instalment if you cut them for a while.”
Prevention is always better than cure, however, so do your homework before you commit to buying a car. You need to work out how much you can afford on repayments, as well as on running and maintenance costs and insurance.
“Many people shoot for luxury cars, stretching their budgets to such an extent that there is no margin for error,” says Mr Fenner. “It’s a much better idea to buy an economical, but still trendy A-segment vehicle, especially if you are a student or young professional. The Datsun GO, for example, is the best-in-class in terms of total cost of ownership according to the 2015 Kinsey Report. When comparing the maintenance cost of a selected basket of service parts and associated labour costs up to the 45 000km and 90 000km services, the GO came out tops.”
Repossession is not inevitable if you get into financial difficulty. To keep your assets and regain financial security, speak to your bank or financial advisor, and do all you can to decrease your monthly expenses. Many people have prevailed through financial difficulties by using a logical, controlled and calm approach to their budgets and creditors.
