08/04/2026
IS “PAWN AND DRIVE” LEGAL IN SA?
No, the National Credit Regulator (NCR) does not approve "Pawn and Drive" schemes, often referring to them as scams and unlawful. While pawning a vehicle for cash is allowed, the NCR has declared that "pawn-and-still-drive-it" schemes are prohibited by the National Credit Act (NCA).
Key details regarding the NCR and Pawn and Drive schemes:
Unlawful Schemes: The National Consumer Tribunal (NCT) has repeatedly declared these schemes illegal.
Risks Involved: These schemes often involve transferring ownership of your vehicle to the lender, who then "leases" it back to you at a high monthly cost. If you miss a payment, you risk losing your car, even if the value of the car is much higher than the loan amount.
Legitimate Alternatives: A legitimate, legal pawn transaction involves the pawnbroker keeping the vehicle in secure storage, not letting you drive it.