Do you want to buy a car on credit? As tempting as it sounds, avoids rushing. Compare, know the conditions, review the contracts and evaluate the best option for you.
Bank or finance company
Among the differences that you can assess to decide on one or the other, he points out, there are the interest rates, in the term, they give to settle the financing, the minimum down payment required to authorize the credit, in addition to the commission for opening.
The specialist recommendation is not to stay with the first offer, but to take the time to compare the different products.
NOTE: It is your decision to decide with whom you take the credit. They cannot condition the sale of the vehicle to a certain credit offer.
In general, distributors have collaboration agreements with most of the banking institutions that offer credit in their branches, so they can help you with the management of the credit process.
24, 48 or 60 months
That said, to decide, take into account how your monthly payment will be, because if you compromise a very high percentage of your finances, it may not be the best idea to take out a loan.
But, if a car is necessary for you and you decide to take it out for 60 months to reduce the amount of the monthly payment, you must assume that the cost of financing rises.
NOTE: Paying the "extra" money you get to capital (Christmas bonus, vacation bonus, some unexpected income) will reduce the amount of the debt.
Most of the institutions that grant credit do not have any type of penalty for advance payments, but it is very important that when you make a contribution, you specify that it is a capital payment, as it is what guarantees that the amount will go to pay the debt, and not, for example, interest.
Doing so implies a debt restructuring, which entails redoing the credit application process, with the expenses that this represents, which is why it is not a recommended option.
For both new cars and used cars on credit, the minimum down payment required either by bank or finance company is usually 20 per cent of the total cost of the car. This may vary depending on a season of promotions or if you are a preferred client of the institution that gives you credit, in which case they can grant you financing for a lower down payment.
As part of the vehicle, in addition to the monthly payment, it considers maintenance expenses, services, rights costs, plates and tenures if applicable.
NOTE: In general, it is best to give the highest possible down payment, since that reduces the amount of credit that will be granted to you.
To choose the type of vehicle and the amount that you will allocate to the monthly payment, make an expenses budget that includes the total income you have, as well as all the expenses that you have committed. For example, in a family, you should consider expenses for housing, education, transportation, food, services.
Just as the distributor cannot condition the sale of the car to obtain the credit with their financier, neither can they force you to contact the insurance policy with them.
But, although you can contact the insurance with the insurer you want, take into account that it must comply with the coverage requested by the credit grantor and that the car must have this coverage throughout the life of the financing.
If from the first year of the life of the loan you prefer to contract it on your own, you must notify the grantor of the loan before signing the contract.
Was the first year free? For the second and subsequent ones, you can also choose the insurance company you prefer, for which you must notify the financial company in advance as required.
If you can pay it in cash, the cost of financing will be lower.
Whether you contract the loan with a finance company or with a bank, when insuring it, this will be the one who should appear as the "preferred beneficiary" of the policy, because in a strict sense, as long as the credit is still in force, they own the car. In the event of a claim, the payment of deductibles to the insurer is your responsibility.
In addition, the guarantees are linked to the maintenance being carried out with the agencies in a timely manner.
Other aspects to consider
NOTE: More than the age of the car, check the maintenance and warranty it offers. In agencies, the age range goes from the latest model to a maximum of 5 years.