Alarm over surge in vehicle repossessions
The Ombudsman for Banking Services (OBS) has warned that the repossession of vehicles by banks is on the rise due to the prolonged heightened cost of living, resulting in motorists falling behind with their vehicle finance repayments.
BusinessTech reports that Nedbank’s latest NedFinHealth Monitor shows that 76% of South Africans say their expenses increased in the past 12 months, while 62% say their spending equals or exceeds their income.
Additionally, 69% of South Africans cannot pay all their bills on time, with 33% who said they were homeowners having been late with their home loan repayment in the past 12 months.
This turbulent environment has led to a rise in repossessions by banks – especially cars – and the OBS Reana Steyn noted that her office has received an influx of complaints regarding the repossessions and said it’s necessary to clarify the rights of both consumers and banks in such circumstances.
She added, however, that it’s important to note that the first legal principle to understand is that under vehicle financing agreements, the vehicle remains the property of the bank until the loan is fully repaid.
‘With financed vehicles, the bank, as the titleholder, remains the legal owner of the vehicle, and ownership only passes to the buyer on payment of the last instalment to the bank,’ Steyn said.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.