Sunday, June 4, 2023

Credits increase the cost of cars by up to 50%

Chihuahua.- While it depends on various factors like down payment, interest rate and tenure, buying a car on credit can cost more than 50 per cent more than buying it in cash, according to a study prepared by this publication house .

An exercise was carried out with a 2023 model sedan car with a sales price of 308 thousand 400 pesos, a down payment of 110 thousand 843 pesos, a term of 60 months and monthly installments of the order of 5 with a fixed rate of 15.68%. Thousand 995.14 pesos showed that the price of the car increased to 470 thousand 551 pesos, ie more than 50% compared to the cash price.

Antonio Moises Morales, president of the Mexican Association of Automobile Distributors (AMDA) in Chihuahua, pointed out that obtaining a car through financing is the first option for buyers nationwide, as more than 58 percent of new vehicle sales are through bank credit. it occurs. Or a brand financial company.

80 per cent of automotive loans are provided by the brand’s financiers and the remaining 20 per cent by banking institutions; Therefore, a buyer will always have an easier time going to an agency and processing financing, as they are more accessible and more easily approved, explained Moisés Morales.

In the state of Chihuahua, more than 60 percent of new car sales are financed through 2022, and 63.1 percent in the first quarter of this year.

On the increase in the price of the car when availing it through financing against cash payment, various conditions affect such as down payment, opening commission, advance payment, credit term and type of financing, although the down payment in each type of credit The higher the number, the lower the monthly payment.

The National Commission for the Protection and Security of Users of Financial Services (Condusef) has an automotive credit simulator in which, according to a combination of income, down payment and terms, it determines the price of a vehicle the buyer can obtain and Can make model. on the market in that range.

The purpose of the calculations and information is to serve as a reference so that the buyer is able to compare different products and services.

Between January and March this year, 211,791 new and pre-owned light vehicles were financed through one of the three main credit options in Mexico, representing sales of 29,437 units, up 16.1 percent from the same period. % is more. , highlighted Automotive Financing Report published by AMDA with information from JATO Dynamics.

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