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Trouble meeting your Vehicle Finance Loan repayment? Here’s what you need to know.
My Money Matters | Written by Absa Staff writer
When your finances take an unexpected turn and you struggle to pay your Vehicle Finance Loan, it’s important to understand your options and take the necessary action. Chelton Keppler from Absa’s Collections department gives us some insight into the options available to help get you back on track.
What is the first thing that you need to do when you realise that you’re going to battle to make your payments?
Chelton:
Be sure to contact the bank as soon as possible, so that the bank can help you with alternative ways to meet your financial obligations. Don’t think that the problem will just go away.
What options are available to individuals struggling to meet their financial obligations?
Chelton:
The available options include the restructuring of payments, also known as forbearance.
This option allows you to restructure your repayments under your Vehicle Finance Agreement.
Examples include:
- A short-term payment plan
This option allows you to pay a percentage of the contractual instalment for a maximum period of six months. - A long-term plan
Here the term of your Vehicle Finance Agreement can be extended to reduce the instalment amount. - Small arrears capitalisation
An arrears amount of not more than two months can be capitalised to your outstanding balance and your term can be extended to ensure that your instalment is not negatively impacted.
Terms and conditions apply to these options, which will be discussed when you contact the bank.
If you’re unable to continue with repayments and want to avoid having the car repossessed, you can use our HelpUSell process to market and sell your car to one of our approved dealers, provided that you meet the qualifying criteria.
You can do this on our secure FASTBuy platform. You’ll need to accept the terms of use and complete the registration process, including uploading images of the vehicle on the platform, to make your vehicle available for sale. You’ll be notified of any offers made on your vehicle. You can then accept an offer that will help reduce the outstanding loan amount on your account.
How does one deal with a deceased estate when there is an outstanding amount owed to the bank on the vehicle?
Chelton:
The deceased’s next of kin must notify the bank of the death and our Deceased Estates team will engage with the appointed executor around available options to settle the bank’s claim. Where there is credit life insurance or other life insurance, a claim needs to be submitted to the relevant insurer. If there is no insurance cover, the executor can arrange to settle the account from the estate funds, or sell the vehicle to a third party or dealer.
If the estate doesn’t have enough funds to settle the balance and there are no offers, the bank can arrange with the executor to sell the vehicle at an auction and the proceeds will be allocated to the account. The estate will be responsible for any shortfalls.
To access the Deceased Estates Guide, please visit the Absa website or call us on 0861 113 003.
For more information or help, call AVAF on 0860 669 669 (option 2).
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Disclaimer: The advice contained on this blog is for general purposes only and does not take into account individual circumstances, objectives or financial needs. Accordingly, readers are advised to seek appropriate advice from licensed professionals prior to making any investment, or taking up a financial product or service.
