How to finance a car
Buying a car is a dream – or even a necessity – for many people. However, this is a wish that may seem distant to those who do not have the money to buy the good in sight. Removing the vehicle at one time is always the best option, but when this is not possible there is the option to finance the total value of the car. There are three ways to finance a car: through Direct Consumer Credit (CDC), leasing or consortium. See how each works and learn how to finance a car:
How to finance a car: what are the types of financing?
The CDC, leasing and consortium are the main types of financing of a car. Those who choose CDC to finance a used or new car should contact banks directly. The amount to be financed and the amount of benefits that will be paid are negotiated according to the income of those who are requesting the financing. In this modality, there is no need for intermediation of the concessionaire that is selling the vehicle. Leasing is another vehicle financing option. In this modality, the vehicle is rented to the interested party, with purchase option. It is also possible to fund a car through the consortium, in which the vehicle is only withdrawn when the person is drawn or his bid for the car is accepted.
How do they work?
Anyone who opts for the CDC to finance the car should make a loan at the bank to buy their vehicle. The car can be withdrawn as soon as the amount is released, but can not be sold until all installments are cleared. In this modality, there is no need to have intermediation of the concessionaire. The negotiation of the interest rates that will be paid are made directly with the bank that will lend the money, which increases the flexibility. Just like the installments, which are fixed at the beginning of the contract and do not change during the pay period.
In the case of leasing, the purchase of the car is made by a leasing company. It is this company that rents the car to the consumer. Who chooses the leasing to finance the car pays the rent of the property, which is registered in the name of the leasing company until the end of the payment of the installments. By removing them, the customer becomes the owner of the car. As in the case of the CDC, lease interest rates do not change and are set early in the contract. There is also no need for dealer intermediation.
In the consortium, the customer becomes part of a group formed by others interested in buying a vehicle. In this mode, you pay the installments, but only receive the car when it is drawn or give a bid, which is an advance of installments to win. The participant of the consortium that offers the highest value is what is contemplated with the vehicle.
What are the differences between them?
Unlike the CDC and leasing, in the consortium the benefits paid change over the payment time. The changes are made according to the price variation of the car that will be purchased. If the value of the car increases, the value of the parcel also rises. The opposite also happens: if the price of the car falls or there is reduction in the Tax on Industrialized Products (IPI), the portion is reduced. In the consortium there is no interest charge, but there is a management fee that is fixed in the contract. Anyone who does not pay the installments of the financing can sue the CDC car and lease and lose the car.