Why You Shouldn’t’ Take Out a Personal Loan to Buy a Car

Securing vehicle finance from a bank is a time consuming process fraught with stress, anxiety and, more often than not, disappointment.

Repeatedly, banks reject vehicle finance applicants on the basis of either a poor credit score influenced by a near prehistoric credit default, or because the applicant has been blacklisted for a similar offence. Fortunately, there is a way to bypass the banking system and the soul crushing admin that comes with it: rent to buy.

The Process

The rent-to-buy process essentially involves renting a vehicle for 54 months before being given the opportunity to buy the vehicle outright at the end of the period. However, there are many more perks within this programme than initially meet the eye. For instance, not only can you terminate the process early if you wish, but you are also given the opportunity to upgrade your chosen vehicle at the end of the period.
By far the most prominent advantage of this programme over other vehicle purchasing methods is the convenience and ease with which one can secure a rent-to-buy contract.

Whereas taking out a personal loan will usually result in time-consuming admin, a high interest rate if successful and undoubted rejection if your credit record is even slightly blemished, making use of the rent-to-buy programme will see you face none of the aforementioned challenges.

The Criteria

Blacklisted individuals, and even those with no prior credit history, are able to acquire their dream car through the rent-to-buy process. In fact, all that is required to secure a contract of this sort is the ability to pay the R15 000 minimum deposit required, and a gross salary of more than R12 000. Not only will you avoid the inevitable stress which is often the direct result of applying for a personal loan from a bank, but the rent-to-buy programme also virtually guarantees that you will get your hands on the keys to your desired car.

The Outdated Personal Loan

Taking out a personal loan to buy a car is an outdated concept, with this financial misstep ultimately providing none of the flexibility afforded by the rent-to-buy option, while also guaranteeing to be twice the hassle with just a fraction of a chance of eventual success.