Financing older used cars

GiG Motors is one of the first dealers to have signed up with Planet42, the rent-to-own company that is democratising vehicle finance in Mzansi. Dealerfloor spoke to Renash Rajkaran to hear how P42 has impacted their business.

Gi G Motors johan and renesh

“GiG stands for ‘God is Good Motors’, and as you can imagine, it was a big leap of faith when Johan van der Walt opened a small showroom in Edenvale in 2015, after starting from humble beginnings, selling vehicles on the pavement.

“I joined GiG Motors as finance manager in 2018, and we have in the past five years grown into one of the most trusted second-hand car dealerships in Gauteng, selling some 70 cars a month with 50% of them going the rent to own route, with over 350 vehicles in stock and two showrooms in Edenvale and Springs.

“Our goal is to help clients buy vehicles best suited for them financially. The fact is that having your own transport makes it that much easier to start a business, or explore work opportunities in South Africa.

“At GiG Motors we pride ourselves in the number of clients we have enabled to take the next step in their lives and look forward to going from strength to strength.

He said Planet42 finances all of GiG’s rent-to-buy sales for the 99.8% of clients whose credit profiles are typically deemed too risky by the traditional big five banks.

Rajkaran said when he did a competitor analysis on Planet42, he liked that their deal is more flexible than the limited kilometre contracts other rent-to-own companies offer, with rentals that are a lot lower, depending on the deposit and risk category.

Johan van der Walt and Renash Rajkaran

“The minimum deposit is based on pre-application, and gold category buyers deposit R3,999 or R8,999 for higher risk categories. On average, the monthly rental amounts include insurance and tracker and are slightly above par with bank payments for a similar car.

“Planet42 offers the most flexible rent-to-own deal with the lowest rate, which is why we sell cars to people all over South Africa financed by Planet42, even paying the bus fare for clients who have to travel from other provinces to fetch their vehicle.”

He said GiG Motors has also been very impressed by how Planet42 bent over backwards to help clients who could not afford to pay the rentals because of lockdown.

The default rate is about 20%, but most people are honest and make new payment arrangements with P42, which is very approachable via, email or WhatsApp customer care.

While the impact of lockdown has derailed most business plans, Rajkaran said GiG Motors is still on track to gradually establish more branches in Mpumalanga and in the Western Cape.

“Lockdown did not impact our plans much, as GiG Motors has been doing business differently from the start, looking at ways to sell vehicles to the 9 in 10 people who do not qualify for vehicle finance from traditional banks.

Planet42 has the same mission, and we look forward to continuing our growth of the past five years with them.

He reassures other used car dealerships who look to register with the innovative finance company that the process is simple and quick.

“They are quietly changing the way used car dealers do business and have enabled us to sell to clients who otherwise could not afford a car,” he concludes.

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