Late Payment in Car Financing Increases by 32%

People may think, and hope, that after so many months have passed since the Covid -19 pandemic hit the world, the profound consequences brought by it should no longer be affecting citizens. However, that is not the case. What is more, after about twenty months, households are still under considerable stress caused by the pandemic situation. Many hard choices were to be made in an attempt to stay safe, healthy and financially stable in the past two years. These choices were made by politicians as well as by individuals who were faced with the crisis. Nowadays, we see the results of those decisions and the economic effects of them, for instance the late payments of debts on financed goods or personal loans, which, according to a survey, have increased by 32% in South Africa.

Pandemics change societies, there are many studies conducted by expert scientists that support this statement. In their studies they mention drastic negative changes, like unrest, social and educational inequality, increased racism, and economic recession as examples of the consequences brought by these situations. In the same guise, they also mention aspects of social life including education, environmental views and critical thinking, which can turn out to have positive and encouraging changes. Conversely, in many countries, South Africa being among them, individuals are struggling to overcome the financial crisis caused by Covid restrictions, and have not yet seen some of the positive possible outcomes.

There is a steady stress placed on South African homes after individuals have lost their jobs, and still not found one, or have seen their incomes go down. When the pandemic began, many citizens applied for loans to pay their debts or just to make ends meet. This has created a spiral of debts from which many cannot escape, people had had to incur in more debt to pay off their existing obligations, and so incremented the money they owed. Moreover, a further example that illustrates these kinds of alternatives chosen was, and still is, not to pay car insurance instalments. Car insurance holders cannot pay their insurance premiums or even their vehicle loans, nevertheless they find themselves in a situation in which their ability to act is limited. Car owners have to make a pick in many cases, they pay their insurance premium, make ends meet, or even face eviction if house loans payments fall behind. This perpetuated situation is the one which gives place for the mentioned 32% of overdue payments.

To make matters even worse for car owners amidst their struggle, and once again as a consequence of the measures taken during lockdown, this past August the price of fuels increased greatly. This increase has put additional stress on households, since it also affects costs in consumer goods, for instance. For many vehicle owners who have incurred in debt and need a way out the best solution may be to seek professional legal counselling. This service is available in South Africa and could help individuals find some relief and guidance, while experts negotiate with creditors.

Payments have fallen behind, people continue to struggle and to fight against an array of post-pandemic consequences, while more seem to appear day by day. Whether economic, education, social or environmental, the far-reaching effects of Covid-19 are yet to be known. At the same time that individuals struggle to make ends meet, they have to continue seeking new options that will help them leave their debts behind and begin constructing a post-covid life. Let’s continue hoping that the brighter predictions will be the ones which win this battle in the post-pandemic world.

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