Why a Simple "Demand" Letter Still Matters
Car subscription and lease-to-own platforms have exploded in popularity from Johannesburg to Cape Town. They offer flexible access to vehicles without the long-term lock-in of hire purchase, and they serve a credit-stretched middle market that traditional banks often overlook. Growth, however, brings an old-fashioned headache: missed payments. New entrants quickly discover that an innovative pricing model does not shield them from the routine grind of debt recovery.
Barnard's litigation team recently helped one such operator chase a stack of overdue accounts. The first step was neither high-tech nor glamorous – it was the classic lawyer's demand: a formal request for payment that sets out the cause of action, the amount due, a deadline, and the legal consequences of ignoring it. A single, properly drafted demand is enough; the law does not insist on repeated reminders. What it does require is proof that the demand actually reached the debtor, so e-mail alone is rarely sufficient unless receipt is acknowledged. This process must be done as soon as possible to strike while the iron is hot, as delayed action may stale the action and prolong the recovery.
The letter must spell out more than the balance outstanding. It should also explain the contract, the clause that has been breached, any interest accruing (if applicable), and the precise date by which compliance is expected. Most subscription clients bundle insurance, service plans and mileage limits into one monthly fee; when subscribers fall behind, they often dispute what portion of the charge relates to which service. A detailed demand heads off that confusion and forces the debtor either to pay or to raise a concrete defence.
Why start with a demand instead of a summons? First, a clear request often prompts immediate payment and saves court fees. Second, many industry agreements and pieces of consumer legislation oblige the creditor to give written notice before suing. Skipping the step can sink the case on a technicality and waste months of recovery time.
In the matter Barnard handled, almost every defaulter claimed either ignorance of the debt or confusion over the contract. That reaction is typical when businesses scale fast and enlist customers through smartphone apps rather than face-to-face signatures. The lesson is to reinforce the key financial terms multiple times – at onboarding, in monthly statements and again in the demand – so that "I didn't know" never gains traction.
If the deadline passes without payment, litigation follows. In practice that means issuing summons in the Magistrates' Court for smaller balances or the High Court for higher-value fleets, attaching the vehicle if it is still in the debtor's possession, and – where necessary – seeking judgment to garnish bank accounts, wages or auction other assets. Each step rests on the foundation laid by the original demand; weak paperwork at the start makes recovery later expensive and uncertain.
For car subscription companies the upshot is clear. Rapid growth must be paired with a disciplined arrears workflow: automated reminders, a single comprehensive demand drafted by counsel, and swift escalation when the date expires. Done properly, the process not only recovers cash but also educates customers, reducing repeat defaults.
Bradley Wright and Pretty Nhlabathi specialise in building these workflows and prosecuting stubborn debts. If your subscription book is swelling but your arrears column is creeping up alongside it, their team can review your contracts, tailor compliant demand templates and, when necessary, move from polite request to court-enforced payment without delay.
Fast cars and faster growth are exciting. Just remember that nothing travels more efficiently through the legal system than a well-crafted letter of demand.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
