Getting Cash for your Car: What are the Options?

[kingr]

A fully paid-up car or truck is a valuable asset – and selling it isn’t the only option if you need funds. In South Africa, there are several ways to get cash for your car, quickly and safely.

These alternatives can be invaluable when you need fast access to cash. However, each has pros, cons and certain costs that you should be aware of before entering into an agreement.

Pawn and drive your car

Pawn and drive schemes are a popular option for generating funds, in the form of a short-term loan for your car.

Partner Content: Pawn My Car

Pros of pawn and drive schemes
The idea sounds great – you get a cash loan against your car, and you’re still able to drive your car during the loan period.

However, the devil is in the details.

Disadvantages of pawn and drive schemes
Often, pawn and drive schemes involve actually transferring ownership of your vehicle to the service provider. You then pay the provider a rental fee to continue driving it.

Essentially, you have to rent back your own car!

This also makes you more vulnerable to losing your car altogether to an unscrupulous lender.

A final disadvantage is that interest rates on pawn and drive loans tend to be pretty high.

A number of pawn and drive companies have found themselves in hot water with the National Credit Regulator (NCR) for unethical business practices, including charging exorbitant loan fees.

The end result is that a pawn and drive scheme can be much more expensive than simply selling your vehicle, or even pawning your car and renting another vehicle until you’ve paid off the pawn loan.

Pawn your car

Well-established car pawn companies, such as Pawn My Car, offer asset-based loans against fully paid up vehicles.

Advantages of pawning your car for cash
Asset-based loans against cars are much more straightforward than pawn and drive schemes. You simply offer up your car as collateral, or security, for a loan.

The loan amount that’s offered will be calculated based on the appraised value of your car. This will depend, for example, on its make, model, age and overall condition.

If you choose to enter into an agreement, the cash for your car is usually paid into your account very quickly – even on the day, you apply for the loan, in some cases.
You don’t lose ownership of the car as part of the loan agreement. Instead, it’s stored as security against the loan. Once you’ve repaid the loan and agreed on interest, the car is returned to you.

Provided your loan provider is accredited by the NCR, pawning your car can be an effective way of generating finance quickly. This is useful if you’re experiencing short-term cash flow issues.

Potential disadvantages of pawning your car
Pawning your car is not the best way to get cash for your car if you’re not expecting your financial situation to improve. As for any kind of loan, be certain that you can meet the terms of an agreement before signing.

Also, be careful to avoid unscrupulous lenders. If anything seems “off” with a loan provider’s website or manner, on the phone or in person, trust your instincts.

It’s best to opt for a pawn company that’s well-established, with multiple physical branches.


Also, make certain that all terms are clear. Opportunistic lenders may charge hefty administration fees, fees for storing your vehicle and penalties for early loan repayment. Others offer terms that are more transparent and fair.

Cars for cash

Cars for cash schemes let you sell a vehicle fast, for a cash lump sum.

Advantages of cars for cash services
A car for cash arrangement will typically generate a larger amount of cash for your car than a pawn deal. Of course, though, it means permanently parting with your vehicle.

Getting cash for your car is an attractive option if you need funds fast.

It’s also an option if you have an older or accident-damaged vehicle that wouldn’t be accepted as collateral in a car pawn deal.

Disadvantages of cars for cash services
A fast-tracked car sale is a “pressure” sale. Typically, you’ll settle for a payout that’s significantly lower than you’ll achieve if you sell your car privately on the used car market.

To ensure you don’t accept offers that are too low, it’s best to start by getting a professional, unbiased valuation of your car.

Once you have that information, approach several different dealers. Shop around for the most competitive offer.

Get an accurate valuation of your vehicle now

Before entering any transactions that involve getting cash for your car, it’s good to have an accurate idea of its market value. Wheel Index’s Car Book Value tool makes it quick and easy to get the book, trade and retail value of your vehicle online.

 

[TurboLlew]

I sincerely hope nobody on here makes use of the pawn and drive services :hammerhead:

On the topic of WeBuyCars and wheelie (which are the latter services mentioned) and in the case of WBC the sheer volume of transactions they go through per day, I think it says quite a lot about our current market and economy.

Three observations:

1. There are a ton of dealers buying cars. These are the same dealers that a customer could have traded the same car in at... but they didn't. This might have been because of the value offered even though WBC are lowballers. It might also be because they don't need a car but do need the cash. Maybe they don't want to be pressured into a sale of another car on a particular dealer's lot? Bizarrely WBC gives first preference to dealers even though, logically, they would be making more money off a customer. The creme of the crop are kept aside for dealers (even though I asked all and sundry to give me a price on an E39 530d on a saturday, you have to wait for dealers to have a shot first. It showed up at a dealer later the next week.)

2. WeBuyCars became somewhat of an alternative to the largely rigged or otherwise pointless auctions. However it has now itself become subject to 'rigging' on prices, what I certainly feel is collusion with dealers (which I've mentioned above) and the cop-outs becoming ever worse. When I was last there it was not just the cheapies sold without mileage guarantees or warranties but even much. MUCH higher end cars. Surely people don't understand what they are getting themselves into? Initially I had good feelings towards the concept (ie: take risk where it makes sense for you and the dealer on cheapies) but it seems it is now just a CPA avoidance exercise. The prices are no longer (IMHO) good enough vs. dealers in order to justify the risk. I suppose they don't care because they are selling a ton of their best stuff to dealers anyway.

3. The phenomenon of the private sale market becoming ever more;
difficult (finance house hoops when dealers do tickbox checks and even fake CORs),
idiotic (I owe R400K on this 300K car so you must pay it or I will treat you like a 'lowballer' or I just spent 30K in maintenance on this 60K car - please pay me 90K #IKnowWhatIHave) and...
dangerous (Hijacking, spoofing plates, deposit scams EVEN AT FRANCHISED DEALERS, fake auctions etc.) to sell in... this leads to people fed up enough to buy from a dealer and desperate enough to sell to a dealer.

Anyway interesting post!

 

[VinceM]

I am so glad I bought from a dealer as the car I bought reflected snags when I got home of which if it was a private deal, I would have been stuffed.
- tail light bulb blew on the same day, found out the actual light is faulty (blasts bulbs), these parts can be pricey
- oil sensor level faulty (a biggie for me)
- drivers seat leather peel (next to seat adjusters)
- engine bay hood liner missing 2 clips (very small item though)
- spare key battery dead
- medical kit missing

small things that can cost you an easy R6 to R8k, dealership gladly sorted all these out (JSN Motors). Its true the private to private market is less preferred for purchases by quite a large population (especially ladies)

As for WeBuyCars, they are convenient to sell to them but with convenience comes the price. I was presented with a ridiculous offer (R95k for a 2010 LCI 3.0d with 248 000km X5). I was fortunate to sell privately, Tris checked retail
and trade, R283k and R230k respectively.
A friend of mine sold his X3 3.0d 2010 model for "peanuts" so to speak and knowing his work and how he looks after his cars, his vehicle was in mint condition. So, yes, its hassle free to sell to them, but as I mentioned earlier on, you pay for that convenience.

With car pawn shops, you have a more than 50% chance of losing your car, things in life happen, you might have an emergency that negates you to repay in the month at the specific time frame, then poof, your car is gone. I would look at other avenues before coming to this.

@TurboLlew, its true some of us, in fact have seen a lot on this forum, are
llusional thinking that we would get a premium back for our well maintained cars, which in the real world it doesn't work that way. A typical consumer will compare specs for specs between cars and take mileage as the deciding point and ignore how well kept a car is, so for some of us, we will keep enjoying our more than a decade old cars so we get our monies worth. if I had to list my 330ci for sale as an example, I would list at between R130k to R145k which is way more than book and what many folks are prepared to pay, like you say, that's what the car is worth to me and what slightly less than what I paid, so I drive the damn thing! drives like a dream anyway.

that being said, there is a lid for every pot hence you find an E30 with book of R20k selling for R100k because of the condition its in and its desirability

If I was looking for cash for my vehicles, I would first try out private sale, then consignment then lastly sell to car buys like WBC.
Avoid car pawning at all costs.

 

[TurboLlew]

Expecting a premium for a well maintained car and expecting all your maintenance money back (or more) are very different things. It is frustrating to deal with a person who is selling something you are willing to pay over market value for on one hand, but who has also totally overestimated what he is actually able to sell it for... at some point as you say you may as well go with a dealer.

When I sold my S2000 it was way (way) over book and still sold the day it was advertised because it was that kind of car... you cant expect the same for something in huge supply in good or acceptable condition.

If you have a very special car or a genuine future classic then the timeframes involved are far longer as you wait for an example in good condition to become rarer and rarer or for a cult following to form (hopefully with the cash to pay for them). At some point you couldn't give away a Z3 M Coupe and E30s cost nothing (and were in plentiful supply in good shape). This is a very different phenomenon to what is being discussed here and quite unpredictable for ordinary cars.