Most of the time, used car owners try to get the most money they possibly can when they finally decide to sell their cars. But sometimes, and for a variety of reasons, private sellers want to get rid of their cars for as little money as possible. It seems that there's no real reason (other than a desire for higher profit) to not sell a car for R1 if your goal is to cheaply transfer ownership of the car from one person to another. Learn more about the specifics of this kind of transaction to make sure you go about it the right way.
Is It Illegal?
South Africa's laws place a lot of specific restrictions on the private sale of used cars, but price doesn't really play into those restrictions. Conventional wisdom holds that used car owners should price their cars competitively, but typically, people who plan to sell a car for R1 already know who they're selling to and aren't so worried about competing with other sellers. There are restrictions on disclosures and paperwork, but sellers are free to set whatever price they want, even if that price is only R1.
Why Would Someone Sell a Car for So Little?
There are a few different potential motivations for selling a used car for only R1. This is a popular technique for legally transferring ownership from one family member to another, for example. Parents who want to give their car to their child and want to make sure the car's registration is in the child's name can sell the car for R1. This gives the transaction all the formality and legitimacy of a standard used car sale while still maintaining the spirit and appearance of a gift. While these types of transactions are common among family members, they can take place between any two parties, including friends, business associates, neighbors and, in theory, complete strangers.
The legal finality of a car sale is a major motivation in selling a car for such a low price. This way, ownership is formally and completely transferred from one party to another. The person who pays R1 is the car's new owner, no question about it. The old owner has accepted a sale price and no longer owns the car. It's a way for people to give a used car as a gift without having to worry about their name still being on the car's license.
What About Taxes?
If you're trying to sell your car as a gift transaction, you may be worried about additional costs being placed on the buyer. This would rather diminish the spirit of the ultra-low R1 price tag. However, used car sales aren't subjected to the same kind of taxation as new car sales. If your goal is to sell the car at the lowest-possible price in order to reduce the financial burden on the buyer, taxes aren't something you need to worry about in South Africa.
How to Sell a Car for R1
Though the price tag for a R1 car sale is unconventional, to reap all the benefits of a traditional sale, the buyer and seller should follow standard procedure as far as filing out documents and transferring ownership goes. Steps such as negotiation and valuation may not be part of the process, but the seller should nonetheless draw up a sales agreement, and both parties should sign it and keep copies. Make sure the price of the car is included in the sales agreement, and list any known defects that the car has or has had. The buyer will need to obtain a roadworthiness certificate, register the vehicle and fill out a change of ownership form. All of these conventions need to be respected and followed in order to ensure the validity and legality of the sale. This may seem like an unsightly and formal set of steps to take in order to give a gift, but in order to respect the law and transfer ownership of your car in a permanent and legally binding way, it's best to follow the rules exactly.
Selling a Car for R1
Car owners in South Africa are free to set any price they desire in order to privately sell their used cars. While most sellers are concerned about pricing and negotiations, some sellers simply want to sell their car to a friend, family member or colleague for R1. There are no restrictions on setting a price this low, and there are several benefits to conducting a private used car sale transaction in this manner. This allows the buyer and seller to enter into a formal agreement in which ownership of the car is unambiguously transferred from one party to the other. The R1 price is a friendly, generous gesture, but it establishes that a legal sale did take place, allowing the buyer to register the car in his or her name and fill out all the necessary legal paperwork.