Sometimes however it can be the cleanest most hassle free and cheapest form of lending cash against your vehicle.
To qualify for a Pawn deal, one has to own one’s car outright. You cannot have a bank lease on the vehicle or any other financing deal. You also need to own it in your name or in a company’s name. If it is in a company’s name you will need to get the directors of the company to approve the deal.
What are your Options?
Well, you could enter into a Lend and Drive/Pawn and Drive deal. Problem with these deals is that they are frightfully expensive. The cost of letting someone drive their own car is very high, as the risk for those companies is extremely high. This is because these companies are trusting they’re clients will pay them each month. And the cost of recovering the vehicle if they don’t make it a very dangerous deal for them. Often the cost of doing a deal like this is so much that one could rent a small car and do a Pawn deal for cheaper than it costs to do a Lend and drive deal.
The other alternative would obviously be to sell the car. This is a good idea if you think you will not be able to pay back a loan in a couple of months. The problem with this is that especially in these Covid times, you probably won’t sell your car for very much. However, when it comes time to buy a new car you might get it at a really good deal!
So, pawning your car makes a lot of sense if you need the maximum amount of money from your car for a short period of time. I say this because the Lend and drive deals don’t lend you as much money for your car as a Pawn deal. This is because the Lend and drive deal has to factor in having to resell your car in 6 months to a year’s time if you don’t pay them. And by that time, the car could be in a far worse condition than when the Loan was originally done!
When you Pawn your vehicle make sure you find a reputable company who is NCR registered. I have heard of horror stories of people pawning there vehicles only to find out that the car has been driven around town and used by employees of the company.
The biggest and best plus factor to a Pawn deal is that your financial status is not as important as for instance a Lend and Drive deal or any other Loan deal. It’s quite simple really…. the vehicle is our security so we are not as concerned about whether you will pay us or not. Because in the unfortunate case of you not being able to pay us, we have your car to sell. And this is why Pawning your vehicle is the easiest most sensible way of getting a short-term loan.
You might be interested in taking a loan against your property in South Africa.
We always like to tell our clients that a Pawn deal should never be considered as a medium- or long-term financing solution. Its just too expensive! The interest and costs on a deal like this are very high. We always suggest that the moment you do a Pawn deal, you are looking for a more permanent alternative financing plan. The Pawn deal literally buys you the time to find that lower interest cheaper deal.
In conclusion, a Pawn deal can help you get you the maximum amount of money on your car as quickly and hassle free that is possible. A Pawn deal must never be used as a permanent solution to your money problems. It must be seen a SHORT-TERM STOP GAP!
Please contact First Advance for your Lending needs. www.firstadvance.co.za
