If you have a bad credit score, it can be very challenging to get a car loan in South Africa. However, there are lenders that offer car finance to people with poor credit scores in South Africa. There are various ways you can qualify for car finance like making a deposit, joint car finance, or applying for preapproval. In this article, we will show you how you can get car finance with bad credit, loan providers, and how to get one.
Financing Options for Car Purchase
- Car finance through a dealership, lender, or bank: This is a common option for buying a new or used car. The interest rate on a car loan will typically be higher than the interest rate on a home loan.
- Home equity loan: If you have a home loan with an access facility, you may be able to take out money against your home equity to finance a car purchase. This can be a good option if you have a good credit history and a low interest rate on your home loan.
- Personal loan: A personal loan can be used to finance anything, including a car purchase. This is a good option if you are buying a car from a private seller or if you are buying an older car that a bank is not willing to finance.
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How to Get Car Finance with Bad Credit
Getting car finance with bad credit is challenging. It is possible to get one through. This is how you can get car finance with bad credit.
- Make a deposit. You need to make a deposit towards car finance to show the lender that you are serious. It is advisable to make at least a 10% deposit of the car’s value.
- Apply for preapproval. When you pre-apply with a lender before visiting the dealership will help you get better rates, especially when you have a bad credit score.
- Compare different lenders. You need to shop around and compare different South African lenders. Consider their rates, loan terms and the repayment period.
- Check credit report. You need to first check your credit report because a small mistake can cost you a lot. You can get a copy of your credit report for free, and then you can fix any errors.
- Joint car finance. You can get car finance in joint names in South Africa. This is where two people sign a contract to share responsibilities. If you have bad credit, joint car finance in South Africa can increase your chances of getting car finance.
Joint Car Finance in South Africa
Can you get car finance in joint names? Yes. You can get car finance in joint names. However, the process may differ from one lender to the other. It is worth noting that not all lenders accept joint applications. Some even impose restrictions. Therefore, you need to shop around to get a lender that can give you car finance in joint names.
For most lenders, there are no restrictions on who you can joint finance a car with. Therefore, you can joint car finance with your child, spouse, relative, or friend. However, some lenders require that both parties reside in the same place. If one party is unable to make a repayment, the other party is expected to repay the loan in full. It is possible for that party to rake a payment holiday. Missed payments affect both parties’ credit scores.
Where to Get Car Finance with Bad Credit in South Africa
You can get car finance with bad credit in South Africa from the following lenders.
Vehicle Finance
Vehicle Finance is great car finance for blacklisted South Africa. The lender does not offer their own financing, instead, they get loans from banks. To qualify for car finance, you need to be employed with a regular income. They offer same-day approval for loans of up to R500,000. Repayment term is up to 5 years and interest rates start from 16.95%.
Requirements
- 3 months’ payslip
- ID document
- Proof of address
- Valid driver’s license
- 3 months bank statement
Blacklisted Car Finance
Blacklisted Car Finance is an excellent vehicle finance in South Africa for blacklisted. You don’t need a credit history to get a bank loan. If you meet the criteria, you can rent to own a car of your choice. Once the rental period is over, you get to own the car. To qualify for the loan, you need to make a minimum deposit of R15,000 and have a minimum R12,000 gross monthly income.
Requirements
- South African driver’s license
- Proof of residence
- 3 months bank statements
- Recent payslip
Auto Sizo
Auto Sizo is a lender that can help you get a low credit score car finance South Africa. You can get car finance for the blacklisted with lender. You can also get rent to buy a car. To qualify for the car finance, you need to be a South Africa resident and be permanently employed.
Requirements
- Valid driver’s license
- Proof of address
- Payslip
After applying for car finance, Auto Sizo will contact you within 24 hours.
Earn a Car
Earn a Car offers personal car loans for bad credit with instant approvals. This means you can use the company for low credit score car finance in South Africa. To get car finance, you need to complete an online application. The lender will then contact you to finalize the agreement. You can then pick up your car within 24 hours. They offer new rent to own vehicles.
Requirements
- Valid driver’s license
- Proof of residence
- Must live in Gauteng or Witbank
- 3 months bank statements
- Recent payslip
- Be over 35 years
- Earn at least R3,500 per month
No Finance Cars
No Finance Cars is also among the best no credit check car finance South Africa. They offer rent to buy and rent to own car finance. You can contact them if you are having trouble getting a car loan. They do not have hidden cots, no interest rates while you also get free roadside assistance. There are minimum approval criteria, and you can upgrade your car every 18 months. You can also terminate the contract at any point.
Requirements
- Minimum deposit of R12,500
- Minimum gross salary of R12,000
- Valid South African driver’s license
Money Expert
Money Expert is car finance for bad credit South Africa. They do not offer car finance directly. Instead, they link you up with a lender. They help you buy a new or a pre-owned vehicle. If you have poor credit score, or you have been blacklisted, this is a company that can help you apply for the loan. You need to pay a deposit to qualify for car finance.
Car Dealerships That Accept Bad Credit in South Africa
Here are some car dealerships in South Africa that accept bad credit:
These are just a few of the many car dealerships in South Africa that accept bad credit.
Buying a Car with Bad Credit in South Africa
If you are looking for a car finance for low credit score or bad credit in South Africa, it can be challenging to find one. The above lenders and card dealership can help you get car finance in South Africa even with bad credit. You can increase your chances of qualifying for car finance by applying for preapproval, improving your credit, making a large down payment, getting a cosigner, comparing different lenders, or applying for a joint car finance. Make sure to shop around and compare prices between different lenders before deciding on a particular lender.
FAQ
What is credit score to buy a car in South Africa?
The minimum credit score required to buy a car in South Africa varies depending on the lender. However, most lenders will require a credit score of at least 660. If you have a lower or bad credit score, you may still be able to get a car loan from the lenders and dealership covered in this article, but you will likely have to pay a higher interest rate.
What is a bad credit score in South Africa?
A bad credit score in South Africa is typically considered to be between 300 and 579. This range indicates a history of missed payments, defaults, or other negative financial events.
