FNB repossessed vehicle sales offer great value for money on a variety of car brands and models. A repossessed vehicle is a car that’s ownership has been reclaimed by the bank. Due to missed monthly instalments on vehicle finance. Because of this the bank needs to make back the money owing on the vehicle and they auction the motor cars off at well below their value price.
In 2008 when the world was struck by recession statistics were that each month approximately R560m in vehicle repossessions occurred.
Another statistic found stated that due to repossessions these vehicles lost approximately 35% of their value. Therefore the banks in South Africa are losing a lot of money every time they repossess a car.
FNB Repossessed Vehicles Available
Although we are out of the recession there are still thousands of cars being repossessed every year. This can be attributed to a number of factors.
One of the major factors is that people are buying well beyond their means as they now have 72 months in which to pay off the car. And think that they can afford the vehicle when they really cannot.
As a result, after six years of paying off the vehicle, they are still stuck with a massive balloon payment. That is more than what the car is now worth.
A balloon payment generally occurs when no deposit has been paid upfront for the vehicle. As you are no longer required to make a deposit on a vehicle.
In addition to this, the more expensive the car is, the more expensive it will be to insure and service it. This further results in the owners not being able to trade in their cars for newer models. So as a result causes more and more vehicles to be repossessed.
Therefore if you are looking for a new personal vehicle or a fleet of vehicles, then FNB repossessed vehicle sales may be something that you should consider.
You can get quality brands such as Audi, Toyota, Mazda, and BMW. All at greatly reduced prices because of the fact that they have lost a large portion of their value when they were repossessed.
How the Covid Pandemic is Affecting Car Repossessions
Because of the Covid Pandemic people are finding themselves in more difficult financial circumstances.
Jobs have been lost and businesses are suffering due to the fear and consumers choosing to hold onto their money. So it’s causing a loss of income for many in South Africa.
As a result vehicle owners are missing monthly car repayments which is leading to more bank repossessions.
FNB Repossessed Vehicle Sales – Words of Caution
Do not buy beyond your means! As mentioned above this is one of the main reasons that cars are repossessed.
Many people would like to believe that in six years time they will be able to afford the balloon payment on the vehicle. Because they will be earning more, be more successful etc.
However a harsh reality of life is that this is mostly not the case. It is therefore important that you work out your budgets carefully. And that you do not spend more than you can. So ignore the Ferrari on the showroom floor. That car is there for the same reason as to why you are opting for something cheaper.
The cars come as is. This means that should you purchase a vehicle at an FNB repossessed vehicle auction. It is always imperative to take a qualified mechanic to inspect the car before you purchase.
Neither the banks nor the auction house are responsible for any problems that may occur once it has left the showroom floor. See if there is a vehicle that you can purchase that is still under warranty as this is the safest bet.
Try and gather up a deposit before you purchase. This way you will not be hit with a giant balloon payment at the end of any instalment period.
If you can afford to pay the car off over a shorter period of time, do so. Do not take an extended instalment period as this can cause problems in the future.
In summary the purchase of an FNB repossessed vehicle can be a good buy if you are in the market for a new set of wheels.
Visit the bank auctions online and offline to see the repossessions available around South Africa.
In addition you can apply for car finance with FNB bank directly.
Follow the tips above before bidding on a car at the auctions and you will get a better deal.