Navigating car repossessions: Know your rights and responsibilities

As the instances of car repossessions surge, it's become increasingly important for consumers to understand their rights and obligations in these circumstances. The South African Ombudsman for Banking Services (OBS) emphasises the importance of knowing the rights and available if consumers are unable to pay car loan instalments.


The prolonged heightened cost of living in South Africa has left many South Africans battling to cope with all their expenses. This is such a stressful time, and it’s normal to want to dodge all the phone calls requesting payment. However, when it comes to your finance, it’s best to be proactive, rather than reactive.

The OBS says that consumers who are having difficulty in making full or timely repayments should consider either returning the vehicle to the bank or renegotiating their credit agreement. Defaulting on payments carries several negative consequences, including an impact on credit reports, potential legal action resulting in added costs, and the possibility of vehicle repossession and subsequent auction, leaving consumers liable for any shortfall.


Amidst complaints about potential coercive tactics by banks, the OBS says that banks must follow the National Credit Act 34 of 2005 (NCA) and cannot repossess a vehicle without following the due procedure outlined in the law. This involves issuing a section 129 notice (letter of demand) after 20 days of arrears, followed by a summons, judgment, and finally, the court order allowing repossession.

Before resorting to legal action, banks typically exhaust internal debt collection processes. Litigation becomes an option only if internal collection methods fail due to consumer evasion.

Amidst rising car repossessions, understanding your rights and responsibilities is crucial. By understanding the legal procedures, maintaining open communication with lenders, and promptly addressing repayment challenges, individuals can navigate through these complexities more effectively.

Remember, proactive communication and awareness of your rights can significantly impact the outcomes of potential car repossessions, ensuring a more informed and empowered approach to resolving financial difficulties.

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