Can’t afford your car payment? Falling behind? (Try this)

Missing a car payment is stressful. But it doesn’t have to mean losing your car.

You have more options than you think.

Here’s what to do if you can’t afford your car payment in South Africa, what happens if you stop paying, and how to protect yourself before things get worse.

Let’s begin.

 

Can’t afford my car payment. What are my options?

If you can’t afford your car payment, in South Africa you can try to reduce your instalment through a payment arrangement or debt counselling, sell or voluntarily return the vehicle, cut other expenses to keep up with payments, or surrender the car before the bank repossesses it.

Here’s a breakdown of each option:

1. Reduce your car instalment: Ask your bank for a payment arrangement, or apply for debt counselling to have your instalment legally reduced.
2. Sell or return the car: Sell the car privately or trade it in, or return it to the bank voluntarily.
3. Cut expenses to keep the car: Review your budget and reduce other costs to free up money for the payment.
4. Surrender the car: Hand the car back to the bank before they repossess it to avoid extra legal costs.

 

⭐ Related content: Car repossession process: How to protect your car

 

Let’s go through each option.

 

1. Reduce your car instalment

If you want to keep your car, reducing what you pay each month is the first thing to look at. This works best when the payment has become unaffordable due to a change in income or expenses. If you go this route, you keep the car and can avoid being “blacklisted”.

It’s worth noting that most temporary arrangements don’t reduce the total amount you owe. They just change when or how you pay it. But it’s still a good choice for most people who can’t afford to pay the full amount.

 

Option 1: Ask for a payment arrangement if you’re behind

If you’ve missed one or more payments, contact the lender or your bank. Explain your situation and ask about a payment arrangement. This could mean a short-term payment holiday, a reduced instalment for a fixed period, or a restructured loan term.

Here’s how to do it:

1. Call your bank/lender/car-financier: Ask specifically about hardship relief or a temporary payment arrangement.
2. Be honest about your situation: Tell them why you’re struggling and how long you expect the difficulty to last.
3. Get the arrangement in writing: A verbal agreement isn’t enough. Ask for a written confirmation of the new terms.
4. Keep making payments until the arrangement is confirmed. This protects you and shows good faith.

 

⚠️ A payment arrangement is not the same as having your instalment officially reduced. The bank can still charge interest on missed amounts, and the arrangement can be cancelled if you miss a payment under the new terms.

This next option is more formal. Which, for many South Africans, makes it a better option.

 

Option 2: Apply for debt counselling to reduce your car instalment

Debt counselling is a formal process regulated by the National Credit Act (NCA). It allows a registered debt counsellor to restructure all of your debt repayments, including your car, into a single, lower monthly payment.

Under debt counselling, your car instalment can be reduced to what you can actually afford. Your assets are also legally protected from repossession while the process is active. This means no one can take the car from you.

This is the most structured and protected option if you’re genuinely over-indebted.

Here’s how it works:

1. Contact a registered debt counsellor: Visit their website or call them. They’ll assess your income, expenses, and debts.
2. A repayment plan is proposed: This includes reduced instalments across all your accounts.
3. The court order approves the repayment plan: This gives it legal force and protects you from creditors.
4. You make one monthly payment: Your counsellor distributes it to your creditors.

 

 

So if your car payment is unaffordable and not just temporarily tight, debt counselling is worth a serious look.

⭐ Related content:

• What is debt counselling?
• How does debt counselling work?

 

2. Sell or return a car you can’t afford

If keeping the car isn’t an option, selling it or returning it to the dealership are both worth considering. This option makes the most sense when the car is worth close to, or more than, what you still owe on it.

The benefit is that you clear the debt and remove the monthly payment from your life. If you sell for more than you owe, you may walk away with money left over. This extra money could go toward a cheaper car if you still need one.

The downside is that you lose the car. If you still owe more than the car is worth (which is common in the early years of a finance agreement), you’ll need to cover the shortfall.

How to sell or return a car you can’t afford:

1. Find out what you still owe: Contact your bank for a settlement amount (or check your email for a statement).
2. Get the car valued: Use a dealership, or a tool like AutoTrader’s free car valuation to get a market value (or browse the web to get an idea of the prices of similar models).
3. Sell privately or trade in: A private sale typically gets you a better price than a trade-in.
4. Settle the remaining balance: Pay the bank the settlement amount with the sale proceeds.
5. If there’s a shortfall: Negotiate a payment plan with your bank to cover the difference. Get this in writing.

 

Those are the first two options. Next up, #3.

⭐ Related content: How to refinance your car

 

3. Cut expenses to keep the car

Sometimes the car payment isn’t the problem. The rest of the budget is. If you can trim enough elsewhere, you might be able to keep up without any formal arrangement.

This works best when the shortfall is small, and your expenses have room to move.

How to do it:

1. List your income and all monthly expenses: Include every debit order, subscription, and regular spend.
2. Identify non-essential costs: Streaming services, dining out, gym memberships, and impulse spending.
3. Cut or reduce what you can: Downgrade plans, cancel what you don’t use, reduce discretionary spending.
4. Redirect the savings to your car payment: Make sure the payment clears before anything else.
5. Review every month: Your situation can change. Keep checking whether the plan is working.

 

If you’re dealing with multiple unaffordable debt repayments, cutting expenses alone won’t be enough. Then, a formal process like debt counselling will serve you better.

 

4. Surrender a financed car before repossession

Surrendering a vehicle means voluntarily returning it to the bank before they take it from you. It’s not a good option. But it can be better than waiting for repossession.

This makes sense when you genuinely cannot afford the car, you’ve already missed payments, the car is worth less than what you owe, and you don’t qualify for debt counselling.

The benefit is that it can reduce the legal costs associated with repossession and shows the bank you’re cooperating. That can sometimes lead to a more manageable settlement arrangement.

The downside is that you still owe the shortfall between what the car sells for and what you owe. Surrendering the car does not cancel the debt, and there is no penalty-free way to return a financed car once the agreement is in place. The outstanding balance follows you regardless of how the vehicle is handed back.

How to surrender a car you can’t afford:

1. Contact your bank’s vehicle finance or collections department: Tell them you want to voluntarily surrender the vehicle.
2. Ask for a voluntary surrender letter: This confirms the process and protects you from additional repossession costs.
3. Return the car in good condition: Damage can increase the shortfall you owe.
4. Get the outstanding balance confirmed: After the bank sells the car, they’ll tell you what’s still owed.
5. Negotiate the shortfall: Ask for a payment plan. Get it in writing.

 

So if you’re already behind and the bank has been in contact, don’t ignore it. Surrendering early is still better than going through the full repossession process.

 

 

What happens if you don’t pay your car instalment?

If you stop paying your car instalment in South Africa, the bank will first send arrears notices and attempt to contact you. If the account remains unpaid, it will be handed to collections, your credit record will be negatively affected, and the bank can apply to the court for a repossession order to take the car back.

Here’s how it typically escalates:

• 1–2 missed payments: Arrears notices and calls from your bank.
• 3 missed payments: Account typically handed to collections or the legal department. Where formal legal action begins.
• Legal action: The creditor sends legal notices and applies to the court for judgment and a repossession order.
• Repossession: The car is taken and sold, usually at auction.
• Shortfall: If the auction price doesn’t cover what you owe, you’re still liable for the difference.

 

The bank does not write off the debt when they repossess the car. The shortfall remains a valid debt and can be pursued through the courts.

 

How many car payments can you miss before repo?

Legally, a bank can begin the process after a single missed payment. Once your account has been in arrears for 20 business days, they can issue a Section 129 notice. You then have 10 business days to respond.

If you don’t, the bank can proceed to court and apply for a Warrant of Execution, which gives them the legal authority to repossess the vehicle.

The full process, from first missed payment to repossession, typically takes two to three months. But the bank can move faster if they choose to, and each step you ignore closes one more door.

The National Credit Regulator (NCR) requires that the Section 129 notice be sent before any legal action can be taken. You also have the right to refer the matter to a debt counsellor, ombudsman, or alternative dispute resolution agent during the 10-day response window. If you ignore it and the bank proceeds, the next step is a default judgement, which gives creditors the legal power to repossess the vehicle or garnish your salary.

So if you receive a Section 129 notice, don’t ignore it. After that, it gets ugly fast.

 

Can my car be repossessed if I make partial payments?

Yes, a bank can still repossess your car if you’re making partial payments, as long as your account is in arrears. A partial payment reduces what you owe but does not bring the account up to date unless the full missed amount is covered.

That said, there’s an important distinction when partial payments are part of a formal arrangement.

If your reduced payments are made under an official agreement, such as a payment arrangement with your bank or a restructured repayment plan under debt counselling, the bank cannot repossess the car while you stick to the arrangement. In these cases, the reduced payments are allowed.

As mentioned earlier, debt counselling goes a step further: once your repayment plan becomes a court order, that protection is legally enforceable, not just an informal understanding with your bank.

⭐ Related content:

• What happens if you owe money and don’t pay?
• What happens if I miss, stop, or can’t pay my debt review?

 

Final thoughts

Missing car payments is serious. But acting early gives you the most options.

The longer you wait, the fewer options you have.

Just remember, repossession doesn’t cancel the debt. You can lose the car and still owe the bank money.

Consider all of your options before you decide to stop paying or hand the car back.

If you can’t afford your car payment cause debt is taking up too much of your income, talk to our team.

We can help reduce what you pay toward debt each month, so your car payment and the rest of your life becomes manageable again. Visit My Debt Hero to see if you qualify and get started.