Pawning a Car in SA: Is it Safe?
Pawning a motor vehicle is an attractive option, especially if you need cash right away or have difficulty getting a loan from a traditional lender, such as a bank.
However, you may wonder if pawning a car in South Africa is safe. Here we consider what’s involved.
The modern pawnbroking industry
Historically, pawnbrokers have a shady reputation, with a perception (whether deserved or not) of street-corner pawnbrokers as barely legal entities set up to prey on desperate individuals.
Things have changed though. Today, many large, reputable firms offer short-term asset-based loans, with interest rates that comply with government regulations.
These loans work in the same way as loans advanced by pawnbrokers always have – you offer an asset of value as collateral for a loan. In the case of pawning a car, the asset you offer is a motor vehicle. The asset is returned to you provided you repay the loan and any agreed interest.
Worldwide, the small loans industry has become far more varied and diverse than it once was, and traditional lenders like banks are facing serious competition from companies that make it faster and easier to obtain loans. This includes asset-based lenders like Pawn My Car.
Pawning a car online: safer than in person
With companies like Pawn My Car, you can now apply for a car title loan online. This means you don’t have to risk your safety (or find a place to leave your car) while trying to locate a lender’s physical premises. It also means you don’t risk being followed by a would-be criminal when you leave.
Once you finalise a loan agreement with Pawn My Car, the funds are transferred electronically into your account. So you don’t have to carry cash.
Will I get ripped off or scammed?
Scams are possible, especially on the internet. Nonetheless, complaints from customers who’ve pawned vehicles in South Africa are extremely rare – despite rapid growth in the local market for pawning vehicles.
The same can’t be said for other categories of loans or for traditional banks, which are the main targets of phishing websites and other online scams.
Find a lender who is upfront about the details of the loan, including the principal amount, the interest rate, any fees and the repayment schedule. If the lender is legitimate, there’s no reason for them to withhold any of this information from you.
Also always read the small print of the loan agreement. Scammers most often make their money by charging exorbitant fees or penalties, and the terms for these may be hidden in legal jargon.
Will I get my car back (in the same condition)?
A company that specialises in pawning cars won’t stay in business for long if it steals or damages its customers’ vehicles. So make sure you choose a lender that has been in business for some time, and that has fixed premises.
A loan agreement you sign is legally binding not just for you, but also for the lender. So it provides you with some legal protection.
In the case of Pawn My Car, we keep all clients’ vehicles in secure, private facilities. Your car won’t be driven or damaged while it’s in our care. Once the terms of a loan have been met, your vehicle will be returned to you in the same condition you left it.
Contact Pawn My Car
Pawn My Car is a leader in the car title loan industry, with physical premises in Sandton, Bloemfontein, Durban and Cape Town. We offer confidential loans with competitive interest rates and no hidden fees.