A financial adviser and a legal expert say financing a car for your debt ridden partner may be a bad idea. Picture Michael Wilson
Couples who could be hopelessly in love with their significant others have been warned against financing car purchases on behalf of their partners, with a leading law expert and financial adviser stressing it was an exercise best avoided.
Some of the common reasons partners finance cars for their significant others include the other lacking affordability or perhaps having a poor credit profile. In other words, the bank deems them too risky and denies them the finance.
The phenomenon entails a boyfriend or girlfriend, using their credit profile, signatures and personal banking information to finance a car for their debt-stricken partner, who would then pay them back.
Normally, this is never disclosed to the bank.
The issue came to the fore on social media platform X, formerly Twitter, when an X user identified only as uMelaphi shared how his girlfriend’s sister took a vehicle loan for a partner under the guise that they would pay them back every month for instalments and insurance, but now they had blocked them and were not paying.
“I know it's dumb, but my girlfriend’s sister bought a car for someone using bank finance and they had a deal that he would pay her every month so she can pay the bank and insurances (for the car).
“Now the man has blocked her. It has been two months, but they (the bank) is still deducting from her salary, what can be done to help her,” he tweeted.
I know it's dumb but my GFs sister took a car for someone ngeBank and they had a deal that he will pay her every month so she can pay the bank and insurances.
— uMelaphi. (@stellz_paRi) September 26, 2023
Now bro has blocked her it's been 2 months. But they are still deducting from her salary, what can help her?
The tweet has been viewed close to 500,000 times as of Wednesday midday, with most of the responses to the situation being shock, anger and “just report the car stolen”. However, reporting the car stolen may seem like a quick solution to a bigger problem, but it could come back to bite.
Advocate Deon Pool, who is a criminal law expert with over 20 years experience in the legal fraternity, said the first mistake anyone could make was going to the police and reporting the car stolen when this was not the case.
He said the aggrieved party could open themselves up to both a criminal and a civil case.
“You certainly should not report the car as stolen because you will be committing perjury which can come back to bite you at a later stage, so opening a criminal case of theft against the ex-girlfriend or the ex-boyfriend would be highly inadvisable,” he said.
Pool explained that theft of a motor vehicle was a schedule 5 offence in terms of the Criminal Procedures Act, which meant the ex-boyfriend/girlfriend could potentially be denied bail or have a protracted stay behind bars. In the long run, the truth would come out and the aggrieved party could be sued in their personal capacity, costing them more money and potentially a criminal record.
“Let's just imagine she is arrested and spends a week in jail, she is going to sue you for having her prosecuted maliciously. It is a very difficult dynamic to navigate, I would say buying a car in your name for a partner is best avoided, but if you do insist, you must have a written contract which states you as the registered owner can terminate the agreement at any time and the vehicle must be returned immediately,” he said.
“If you want to buy your girlfriend a car, buy her a car to use, not to own. You are the registered owner of the vehicle. Once you marry her, then she can own the vehicle,” said Pool.
Phumelele Ndumo, who is a financial adviser and founder of Thuthuka SA, a black woman owned financial services provider, said the practice of financing a car for a partner was akin to financial abuse and usually women were the victims.
“These things normally happen between girlfriend and boyfriend, and unfortunately it is often the girlfriend doing this big purchase for the boyfriend.
“I have had a few cases of such before, I think something that is often not spoken about is that this is financial abuse.
“There's nothing that she has to gain by doing this, because when you do this you are making yourself vulnerable and at the end of the day it is your signature, you are the one who will be liable and it will be your credit record and credit profile that will be messed up if the other party suddenly decides they are not paying,” said Ndumo, who is also the author of the SA best-seller From Debt to Riches.
Ndumo said her advice would always be “do not do it”, flagging the practice as a “no go”.
“So if you ask me if someone has a bad credit record and they desperately want to buy a car, my advice would be, ‘if you have the money to buy a car, then why don't you use that money to clear your name’.
“For me it's a big no go area. Just don't go there, because if he doesn't pay, which I would expect sooner or later, there is absolutely nothing you can do but maybe demand the car back, sell it and deal with the ramifications,” she said.
Pool said there was recourse for partners who had been back stabbed by their former lovers, but it would be a long and potentially costly exercise in the courts. He said if the other partner was poor, trying to recover your losses in court was best avoided as it would be an empty judgment.
Pool advised those who enter into such arrangements to always have a written agreement setting out the responsibilities of both parties in the deal. He said the banks typically did not entertain such agreements, but these would be useful in the case of a dispute between the two parties at a later stage.
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