A car may not be an appreciating asset but it is an asset of value – and selling it isn’t the only way you can access this value. In fact, you can use a car to get cash in South Africa in a variety of ways.
Ways you can use a vehicle to secure funds in South Africa
Even older cars have value. There are a few ways of accessing this value that you may not have considered. Below, we look at how to use a car to get cash in South Africa.
Renting out your car
Private owners of vehicles can now rent their cars to other drivers to raise extra funds.
A number of online platforms, such as Rent Out My Car, facilitate the process. Calling themselves “peer-to-peer car rental services”, they match vehicle owners to renters, process payments and usually provide insurance for the vehicles.
Another alternative is to rent your vehicle to a driver of a ride hailing service for an agreed monthly sum. An intermediary or fleet partner typically manages transactions and pays out remittances.
Both Uber and Bolt operate P2P car rental services.
Bolt’s P2P car rental service lets South Africans register to rent out their cars to verified Bolt drivers. Regular vehicle inspections and routine maintenance are part of the deal.
Uber operates a fleet vehicle solution. Owners of two or more cars can register to become an Uber fleet partner, and rent their vehicles to Uber drivers through the fleet app.
Of course, you won’t have access to your vehicle whenever a client is using it.
There’s a risk of damage to the car. This includes minor damage that might not be covered even if an applicable insurance policy is in place.
Also, if the car is in a road accident when someone else is at the wheel, there could be legal and insurance-related issues to navigate.
If you are available and able to drive, you can always become an Uber or Bolt driver, or find work as a driver for a food or ecommerce delivery service.
Using your car for advertising
Using a vehicle to promote ad campaigns is an easy way of making a bit of extra pocket money.
Eazy Ads and UPS Marketing pair high mileage drivers with leading brands, and manage the wrapping and removal of ad decals.
All you have to do is sign up and drive, and you’ll be paid a monthly remittance for displaying the ads.
Film production companies in South Africa often require vehicles as props, and pay attractive daily or weekly rates.
Vehicles can be listed online with niche supply and logistics businesses, like Filmable, or by contacting the Ugly Duckling’s Filmset Directory and registering your car.
Offering specialised transportation services
Another option is to offer your car, and your services as a personal tour guide, or to transport children safely to and from school, and charge accordingly.
Specialist transportation services are also typically required for the elderly or those with mobility challenges.
Opportunities can be found at online job sites or via businesses offering home care services for the elderly. Care Champ, for example, requests interested South Africans to apply to become ‘companion’ drivers.
Pawning your car
Pawning a vehicle is one of the most overlooked ways of using a car, bakkie or motorcycle to get cash in South Africa.
This is a fast, straightforward option for raising funds, without losing ownership of your vehicle. It involves using the car as security for a loan.
The loan provider keeps your vehicle in a secure facility for the duration of the loan agreement, Once the loan is repaid, it is returned to you.
Please note that we warn strongly against “pawn your car and still drive it” schemes (as does South Africa’s National Credit Regulator). These schemes pose an unacceptably high risk that you’ll end up losing your vehicle to the loan provider. Find out more in this Daily Maverick article.
Selling your car
Selling your car is likely to raise the largest amount of money – although once sold, you’ll obviously no longer have your vehicle.
If you need funds fairly urgently, there is an obvious pitfall – selling a car takes time.
It’s never a good idea to rush this process, or you risk getting less than its true market value. Rather investigate all offers and options.
For example, get offers from multiple dealers and consider advertising the car directly yourself (a less convenient option but likely to secure a better price).
In South Africa, also remain mindful of your security. For example, don’t agree to meet potential buyers at addresses they give you or at times or places that could be unsafe.
Prerequisites for using a vehicle to get cash
Before you can use a car to secure funds, it must be fully paid off. It can’t be financed by a bank or another financial institution.
The car must also be registered in your name.
Choosing the best alternative for your financial situation
Before you decide which way to use your car to get cash, consider your financial situation.
You need cash now, to bridge a short-term gap
You might need a quick cash injection to cover unexpected expenses or to take advantage of an opportunity.
If this is a short-term situation and you expect funds to come your way in the near to medium term, pawning your car is a good option. It means you won’t have to sacrifice ownership of the car, or put up with other people driving it (and potentially damaging it).
Car pawn agreements are designed to provide short-term finance.
You need cash but aren’t realistically expecting your financial situation to improve
If you are short of cash and the situation isn’t likely to improve over the short term, a loan or car pawn agreement isn’t the best answer. No type of loan is a good idea if you’re not certain you’ll be able to pay it back.
Instead, it may be worth investigating whether you can rent out your car. This could supplement your monthly income.
If you decide to sell your car instead, aim to get a good price rather than selling it in a hurry.
If you have a lot of debt and your financial situation is becoming overwhelming, it’s worth seeking professional debt counselling. Even if it takes time and perseverance, there is always something that can be done to resolve a stressful financial situation.
You need funds but have plenty of time
If you don’t need money in a hurry, can afford to wait a few months and aren’t reliant on your car, selling the vehicle will get you the most money upfront.
Time allows you to market your car properly – privately or via dealers – and wait for an attractive offer.
How to get the best deal when using your car to get cash
No matter which route you decide on, make sure you get the best deal.
Do some research to find the best dealer or lender. Read online reviews to find the most trusted, well-established company.
Find out what your vehicle’s current market resale value is. This will ensure you get a good deal whether you sell or pawn your car.
Also keep your car in good condition and try to stay up to date with services.
How LoanAgainst can help
LoanAgainst is a division of a registered financial services company, with branches in major cities across South Africa. Advantages of our car pawn service:
- fast access to funds
- no hidden costs or early payment penalties
- no impact on your credit rating
- discreet and confidential
- competitive interest rates
- you retain full ownership of your car.
For more information about pawning a car as a way to get cash in South Africa, call us on 27 10 745 7061 or simply complete and submit our online loan application.
