pawn and drive

Pawning a vehicle to secure a short-term loan is a low-risk way of obtaining funds on short notice but beware of lenders who offer so-called ‘pawn and drive’ schemes.

Schemes that advertise they’ll let you pawn and still drive your car are naturally tempting. However, they may put you at risk of unscrupulous lending practices.

The risks of pawn and drive your car schemes

Pawning a vehicle is permitted under the National Credit Act. However, the National Credit Regulator (NCR) has warned against lenders that claim you can still drive your car when you use it as collateral against a loan.

This is because of the high risk that consumers could end up losing their vehicles.

Excessively high interest and fees

Because the borrower is still allowed to drive their vehicle, there is a greater risk to the lender. Accordingly, lenders in this category they often charge much higher (and unregulated) interest rates and fees.

Pawnbrokers that don’t comply with the National Credit Act are free to charge excessive interest and other fees.

In a recent case in Gauteng, a pawnbroker charged a couple over four times the allowable initiation fee on a loan that was based on their double cab bakkie.

Loss of ownership at the outset of the loan period

There is also less protection for the borrower because pawn and drive schemes usually require the borrower to sign ownership of the vehicle over to the lender.

In order to keep driving the car, the borrower is essentially charged rent. Once the loan is repaid, you may even be required to buy your car back from the lender.

What to look for in legitimate asset-based finance

As long as you only use a legitimate lender, asset-based finance or pawning is a good way to secure a short-term loan.

To make sure you’re dealing with a reputable lender, only deal with companies that meet these requirements:

  • registered with the National Credit Regulator (NCR) and the Financial Services Board
  • provide a physical address and have decent premises
  • own a website with pertinent information and a professional “look and feel”
  • issue transparent terms and conditions
  • don’t have hidden fees or early settlement penalties.

Pawning your car with lamna

At Lamna, we don’t offer pawn and drive schemes as we understand the risks these offers place on our clients. We take pride in being a reputable company and we’re fully accredited with the National Credit Regulator and the Financial Services Board.

Other reasons to choose lamna:

  • our interest rates are competitive and fall within NCR guidelines
  • we don’t charge hidden fees or early settlement penalties
  • we don’t share your details with credit bureaux or other third parties
  • your assets are valued by independent appraisers
  • loan applications are processed while you wait
  • funds are transferred to your account via EFT, usually with 24 hours

At Lamna, we offer fast, discreet loans against the value of a wide range of assets, from luxury watches and jewellery to vehicles or artwork. For more information about using an asset to secure a short-term loan, contact us on 086 111 2866 or simply complete and submit our online application form.

Complete our Online Application Form

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APR & Loan repayment period

Fixed rates range from 36% to 60% APR and payment options range from minimum 3 to maximum 24 months. Apart from the initiation and monthly fees shown below, the only additional fee is credit life insurance if the borrower does not have this already.


All accounts may be renewed if they are up to date.


All payments are made via EFT or direct deposits into Lamna’s bank account. There are no debit orders.


Non-payments may result in the matters being escalated.

Illustrative example

Client borrows R10,000 for 90 days.

Loan Amount Repayment Period Monthly Repayment Total Cost of Loan Initiation Fee Monthly Fee
(Interest + Service charge)
R10 000 3 months R568.40 R12 902.20 R1 197 R560 60%