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Need a New Car?

If you are already in debt review and have a court order restructuring your debt repayments then you are taking positive steps to get out of debt. Well done!

For many who have been in debt review for a while you may now have gained financial equilibrium and may be thinking about new expenses such as upgraded or updated transport. Or maybe you have a problem with your current car and need to make a plan.

But with not being able to make more debt while in debt review is it possible to get a new car while under debt review?

Let’s find out.

Living In Constant Debt Is Normal These Days

Normally, most people who have debt just keep using debt every month, never really paying it off, just rolling the debt from month to month. They never really ever settle all their debts. They live in constant debt.

This includes going shopping for food with credit cards and paying towards one vehicle and then upgrading after a few years before even settling the initial car debt. The car is traded in and the new payments for the newer vehicle are hopefully not too much more than the previous one.

This is pretty normal. For some people however the figures start to shift and soon they are maxed out on all their lines of credit and collections agents are harassing them for payments. This is when debt review can be a life saver.

‘While in debt review the idea is to drastically reduce and eventually eliminate debt totally’

Life under debt review after some debt counselling is very different from life outside of debt review.  While in debt review the idea is to drastically reduce and eventually eliminate debt totally. This is not something most people ever even dream of. It is a rare accomplishment to not have any debt these days.

Less Debt Not More

While in debt review your debts slowly shrink and shrink and eventually one after another are paid up.

Eventually, only one or two bigger debts are left (like car finance or a bond) and then eventually you are able to leave debt review having broken the chains of debt.

But if you are currently in debt review you may want or need car now…not later.

 So, is it possible to get car finance while under debt review?

No.

The entire focus of debt review is paying off debt not making more. Also, truth be told, you probably can’t really afford to take on new debt and credit providers will not offer you even more credit to buy a car when you have a lot of debt.

You may need to look for other solutions.

Other Solutions

Since you cannot get more credit (other than a consolidation loan) while under debt review you may be looking for other ways to address your transport needs.

Family members may be able to loan you a vehicle or you may look at renting a vehicle during this time. Both of which can help you address your need but come with their own considerations.

Car rentals can be pricey since they factor in car services and maintenance etc.

Lending a vehicle from family can involve being beholden to them and making sure you are covered on insurance.

Another option is to look at public transport and service like Uber. If you do the math and really consider all the costs of petrol, car services, insurance and maintenance you may actually find that using such services is similarly priced to buying, but with lower risk.

Whatever you do, beware of scammers offering to get you out of debt review with false promises that you will be able to go and get finance for a car. They could trick you into losing all your progress in paying off your debt. Rather look for other solutions.

Service and Care for Your Car While in Debt Review

If you have entered debt review then it is important to ensure your vehicle is insured (a contractual requirement of credit providers) and that you take good care of your car.

This could include services, wheel alignment, minor repairs, cleaning and polishing and new tires as needed.

If you take good care of your vehicle, it can serve you well throughout your debt review so that you do not need new car finance.

Did You Know?

If your car is written off due to an accident, the insurance will pay the credit provider the rest of the money that is owed. It will not automatically buy you a new car to use however.

Speak to your Debt Counsellor about insurance product service providers that can help ensure you get a set of wheels if your vehicle should be written off during debt review.

Getting a New Car

Once your debt review is over, it will be time to start thinking about responsibly using credit again.

This time, of course, you will want to ensure that you use credit wisely and do not over extend yourself.

One of the things you will want to do after your credit score is looking good is to consider a car purchase.

When that time comes: Do the math and make sure it is actually worthwhile and that you will easily be able to afford monthly repayments. Otherwise look at rent or rideshare options.

Buying a vehicle is a very big financial decision and should never be entered into lightly and it is not one that you can consider until your debt review is successfully over.