Get your own vehicle finance

Instalment sale

If you do not use the car for the production of your income, i.e. it is mainly for private use, you would choose an Instalment sale. You must pay a deposit of 10% (if you can pay more it will reduce your vehicle repayments) and must pay it off in 54 months or less. You do not get any tax benefits on this type of vehicle finance, but if you are a business owner you can depreciate the vehicle at 20% per annum for five years. When your last instalment is paid, ownership of the vehicle will pass to you.  Unfortunately this option is not available to clients with a bad credit record.


Lease or Rent to Own vehicle finance

In the past, to qualify for leased vehicle finance you had to use the car for the production of your income. These days even blacklisted clients or clients with a poor credit history may also apply for leased vehicle finance or Rent to own vehicle finance though selected dealers. If you are self-employed and have a healthy credit record you can claim maintenance and running costs from the receiver.

The maximum period of a lease is 60 months. At the end of the lease you have the following options: You can take ownership but you will have to pay tax on the market value of the vehicle at that time. Or you can hand the vehicle back to the bank, but this is rarely done because the vehicle almost always has a decent value and is often used as a trade-in against a new car.

Your credit history doesn't have to affect your ability to get a quality vehicle. Rent-To-Own program makes getting a quality vehicle available to all customers. A Rent to Owe vehicle ( Vehicle finance for blacklisted ) come licensed, inspected and ready to drive, examined by mechanics and most come with extended warranties.

Residual lease

Many business owners opt for a residual lease or balloon payment lease. This means that they finance 60% of the car and pay the remaining 40% (these figures are negotiable) at the end of the lease. Although this reduces the monthly payment, it is the most expensive way to finance a car. The 40% residual value attracts interest charges over the entire period of the contract. If the businessperson is not in the position to pay off the residual they have to finance it for a further period.

Access bond

With the advent of the access bond, many people are using the equity in their homes to finance vehicles. Although a cheaper form of financing, be aware of the pitfalls. If you're not disciplined you could end up paying for your car over a period of 10 years. If you use this option, pay in the extra money religiously over a fixed period of time. Government is proposing a Bill that will force lenders to institute an interest rate penalty to home owners whose bond exceeds 80% of the equity in their home, so the benefits may be lost



Car Finance for Blacklisted Clients

Car finance for people who are blacklisted, have a bad credit history or are in financial difficulty with debt problems is available, providing people can come up with a certain percentage of the vehicle value in cash. Getting blacklisted or falling into debt and needing assistance in how to get out of debt and resolve the situation so that you can afford a car with vehicle finance is nothing to be ashamed of, many people are in the same situation and bad debt car loans are available to client with bad credit.  Bad credit car loans or Rent to Buy finance could be the answer.

Basically, car finance for a person who has been blacklisted is termed as “Non Standard Finance”. Non standard vehicle finance offers you the chance to obtain an auto finance package when you are blacklisted or have a black mark on your name in your credit history. There is certain documentation to be submitted when applying for bad credit vehicle finance including completing an application form, submitting documents such as a valid Drivers License, Identity Document, Proof of Income, bank statements and proof of residence address.

Should you qualify for vehicle finance and prove to be consistent at paying back your monthly premiums then this will have a positive effect on your tarnished credit record. Pay off your car quickly and efficiently and you may stand the chance of even getting yourself off the blacklist and back to some kind of financial freedom again. Do some in-depth research online before making a decision on the types of car finance for people who are blacklisted you think may suit you and make sure you make the correct decisions.

Get approved for car loans in South Africa with a bad credit record or even if you have been blacklisted because of defaulting on previous accounts by opting to apply for a secured loan. Financial credit providers for the most part will be cautious in lending money to people who have been blacklisted or recorded as having a bad credit record due to the fact that they are seen as a high risk to lend money to. You can improve the chances of getting approved for vehicle finance by opting to apply for a secured solution instead of going for unsecured.

The chances of getting approved by banks for a car loan if you have a bad credit record or been blacklisted are slim, if not impossible with the credit act laws in South Africa that ABSA, Nedbank, Standard Bank and FNB have to abide to. The best chance you have at getting approved for any kind of vehicle finance is to opt for the online applications which get forwarded to a number of registered credit providers. Out of those credit providers there may be one who is willing to look at your circumstances and decide to offer you a secured loan providing you have property or something of value to sign against the money you need to borrow.

This kind of solution, although quite possible in many circumstances, must be approached with some caution though. If you have signed your house or property against borrowed money in the form of secured finance and you end up defaulting on payments, the creditor has every right by law to take your house and sell it to recover the outstanding funds. The possibility then exists if everything goes wrong that a borrower can end up penniless and in fact homeless! Not a place any of us want to be so be warned. There are quite a few legally registered financial credit providers offering to help South Africans get approved for a car loan even if blacklisted or recorded as having a bad credit history.



If you receive a car allowance there are several finance options available to you. As a travel or car allowance is to compensate you for travel expenses incurred on behalf of your employer, it is important to choose the finance option that best suits your needs.

The increase in vehicle prices is a major problem for companies on a Company Car Scheme. A travel allowance is to compensate the employee for business travel undertaken in your own car on behalf of your employer. Only 60% of the allowance is deemed remuneration and is subject to employees' tax. The full allowance is, however, subject to tax on assessment.

Any other amount received from the employer in addition to a travelling allowance, for vehicle related expenses such as fuel, maintenance, repairs, insurance or capital repayments, forms part of the travelling allowance, 60% of which is also subjected to employees' tax. The full amount will be disclosed on the IRP5 certificate and included in the gross income for the year. At the end of the year the employee should claim a deduction for the costs of business travel and this deduction will then be set off against the travelling allowance in the income tax return.

Thus, if the deduction for business travel is less than 60% of the allowance, the employee will probably have to pay in tax on the difference (in other words, the amount by which 60% of the allowance exceeds the business travel deduction). If the deduction exceeds 60% of the allowance, the employee will have paid too much employees' tax and may be entitled to a refund from the Receiver of Revenue.

Claiming your deduction for business travel:

On submission of the tax return, the employee may claim business travel expenditure as a deduction against the travel allowance. The claim can be formulated in one of the following ways:
Actual business kilometres multiplied by actual costs (log book required);
Actual business kilometres multiplied by gazetted rate per kilometre;
Deemed business kilometres multiplied by gazetted rate per kilometre;
Deemed business kilometre multiplied by the actual costs.
For deemed business mileage SARS regards the first 18 000 travelled as private travel and the balance, up to a maximum of 14 000 kilometres as business travel. It is advisable to keep a logbook when you travel:
More than 32 000 kilometres per year;
More than 14 000 kilometres on business per year;
Less than 18 000 kilometres per year.
It is important to note that the Act refers to "private travelling" (including travelling between his place of residence and his place of employment or business or any other travelling done for his private or domestic purposes - "his" refers to the person who receives the travelling allowance).


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