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The maximum period
of a lease is 60 months. At the end of the lease you
have the following options: You can take ownership
but you will have to pay tax on the market value of
the vehicle at that time. Or you can hand the
vehicle back to the bank, but this is rarely done
because the vehicle almost always has a decent value
and is often used as a trade-in against a new car.
Your credit history
doesn't have to affect your ability to get a quality
vehicle. Rent-To-Own program makes getting a quality
vehicle available to all customers. A Rent to Owe
vehicle (
Vehicle finance for blacklisted ) come licensed,
inspected and ready to drive, examined by mechanics
and most come with extended warranties.
Residual lease
Many business owners opt for a residual lease or
balloon payment lease. This means that they finance
60% of the car and pay the remaining 40% (these
figures are negotiable) at the end of the lease.
Although this reduces the monthly payment, it is the
most expensive way to finance a car. The 40%
residual value attracts interest charges over the
entire period of the contract. If the businessperson
is not in the position to pay off the residual they
have to finance it for a further period.
Access bond
With the advent of the access bond, many people are
using the equity in their homes to finance vehicles.
Although a cheaper form of financing, be aware of
the pitfalls. If you're not disciplined you could
end up paying for your car over a period of 10
years. If you use this option, pay in the extra
money religiously over a fixed period of time.
Government is proposing a Bill that will force
lenders to institute an interest rate penalty to
home owners whose bond exceeds 80% of the equity in
their home, so the benefits may be lost
Car Finance for
Blacklisted Clients
Car finance for
people who are blacklisted, have a bad credit
history or are in financial difficulty with debt
problems is available, providing people can come up
with a certain percentage of the vehicle value in
cash. Getting blacklisted or falling into debt and
needing assistance in how to get out of debt and
resolve the situation so that you can afford a car
with vehicle finance is nothing to be ashamed of,
many people are in the same situation and bad debt
car loans are available to client with bad credit.
Bad credit car loans or Rent to Buy finance could be
the answer.
Basically, car finance for a person who has been
blacklisted is termed as “Non Standard Finance”. Non
standard vehicle finance offers you the chance to
obtain an auto finance package when you are
blacklisted or have a black mark on your name in
your credit history. There is certain documentation
to be submitted when applying for bad credit vehicle
finance including completing an application form,
submitting documents such as a valid Drivers
License, Identity Document, Proof of Income, bank
statements and proof of residence address.
Should you qualify for vehicle finance and prove to
be consistent at paying back your monthly premiums
then this will have a positive effect on your
tarnished credit record. Pay off your car quickly
and efficiently and you may stand the chance of even
getting yourself off the blacklist and back to some
kind of financial freedom again. Do some in-depth
research online before making a decision on the
types of car finance for people who are blacklisted
you think may suit you and make sure you make the
correct decisions.
Get approved for car
loans in South Africa with a bad credit record or
even if you have been blacklisted because of
defaulting on previous accounts by opting to apply
for a secured loan. Financial credit providers for
the most part will be cautious in lending money to
people who have been blacklisted or recorded as
having a bad credit record due to the fact that they
are seen as a high risk to lend money to. You can
improve the chances of getting approved for vehicle
finance by opting to apply for a secured solution
instead of going for unsecured.
The chances of getting approved by banks for a car
loan if you have a bad credit record or been
blacklisted are slim, if not impossible with the
credit act laws in South Africa that ABSA, Nedbank,
Standard Bank and FNB have to abide to. The best
chance you have at getting approved for any kind of
vehicle finance is to opt for the online
applications which get forwarded to a number of
registered credit providers. Out of those credit
providers there may be one who is willing to look at
your circumstances and decide to offer you a secured
loan providing you have property or something of
value to sign against the money you need to borrow.
This kind of solution, although quite possible in
many circumstances, must be approached with some
caution though. If you have signed your house or
property against borrowed money in the form of
secured finance and you end up defaulting on
payments, the creditor has every right by law to
take your house and sell it to recover the
outstanding funds. The possibility then exists if
everything goes wrong that a borrower can end up
penniless and in fact homeless! Not a place any of
us want to be so be warned. There are quite a few
legally registered financial credit providers
offering to help South Africans get approved for a
car loan even if blacklisted or recorded as having a
bad credit history.
If you receive a
car allowance there are several finance options
available to you. As a travel or car allowance is to
compensate you for travel expenses incurred on
behalf of your employer, it is important to choose
the finance option that best suits your needs.
The increase in vehicle prices is a major problem
for companies on a Company Car Scheme. A travel
allowance is to compensate the employee for business
travel undertaken in your own car on behalf of your
employer. Only 60% of the allowance is deemed
remuneration and is subject to employees' tax. The
full allowance is, however, subject to tax on
assessment.
Any other amount
received from the employer in addition to a
travelling allowance, for vehicle related expenses
such as fuel, maintenance, repairs, insurance or
capital repayments, forms part of the travelling
allowance, 60% of which is also subjected to
employees' tax. The full amount will be disclosed on
the IRP5 certificate and included in the gross
income for the year. At the end of the year the
employee should claim a deduction for the costs of
business travel and this deduction will then be set
off against the travelling allowance in the income
tax return.
Thus, if the
deduction for business travel is less than 60% of
the allowance, the employee will probably have to
pay in tax on the difference (in other words, the
amount by which 60% of the allowance exceeds the
business travel deduction). If the deduction exceeds
60% of the allowance, the employee will have paid
too much employees' tax and may be entitled to a
refund from the Receiver of Revenue.
Claiming your
deduction for business travel:
On submission of the
tax return, the employee may claim business travel
expenditure as a deduction against the travel
allowance. The claim can be formulated in one of the
following ways:
Actual business kilometres multiplied by actual
costs (log book required);
Actual business kilometres multiplied by gazetted
rate per kilometre;
Deemed business kilometres multiplied by gazetted
rate per kilometre;
Deemed business kilometre multiplied by the actual
costs.
For deemed business mileage SARS regards the first
18 000 travelled as private travel and the balance,
up to a maximum of 14 000 kilometres as business
travel. It is advisable to keep a logbook when you
travel:
More than 32 000 kilometres per year;
More than 14 000 kilometres on business per year;
Less than 18 000 kilometres per year.
It is important to note that the Act refers to
"private travelling" (including travelling between
his place of residence and his place of employment
or business or any other travelling done for his
private or domestic purposes - "his" refers to the
person who receives the travelling allowance). |
