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A Fin24 user who is under debt review wants to know if it is safe for her to buy a car.
Friedl Kreuser of 6cents, a division of Summit Financial Partners, responds:
While you are under formal debt review, you cannot access any more debt, so you would not be able to apply for vehicle finance.
Also, if you happen to have enough cash to buy a car without financing, that cash should be disclosed to your debt counsellor and used to pay your existing debt.
You could, however, consider leasing a car, which is a month-to-month service agreement that would not be seen as debt (much the same way you would rent a house).
If you miss payments, you would simply lose access to the car for the relevant month. There are a handful of companies in South Africa that do provide car rental services, so shop around and look for the most affordable option.
As you are under debt counselling, however, settling your debt as fast as possible should still be your first priority, so compare the cost of renting a car to your current transport costs and make sure you keep your expenses as low as reasonably possible.
Also, remember to discuss any significant changes in monthly expenses with your debt counsellor, as they may need to update your payment proposal.
- Fin24
Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.
Friedl Kreuser of 6cents, a division of Summit Financial Partners, responds:
While you are under formal debt review, you cannot access any more debt, so you would not be able to apply for vehicle finance.
Also, if you happen to have enough cash to buy a car without financing, that cash should be disclosed to your debt counsellor and used to pay your existing debt.
You could, however, consider leasing a car, which is a month-to-month service agreement that would not be seen as debt (much the same way you would rent a house).
If you miss payments, you would simply lose access to the car for the relevant month. There are a handful of companies in South Africa that do provide car rental services, so shop around and look for the most affordable option.
As you are under debt counselling, however, settling your debt as fast as possible should still be your first priority, so compare the cost of renting a car to your current transport costs and make sure you keep your expenses as low as reasonably possible.
Also, remember to discuss any significant changes in monthly expenses with your debt counsellor, as they may need to update your payment proposal.
- Fin24
Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.
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