Thursday, December 08, 2022

Do you want to buy a car on credit? that’s what you need to know

According to Odata – a platform for the sale of certified pre-owned vehicles between individuals – in Mexico, six out of ten cars are purchased using automotive loans given through banks or financial institutions.

Getting an automotive loan represents a responsibility, so you should analyze your personal finances before doing so, so that you can choose the credit option that best suits your budget. To guide you in this decision, we share a list of factors that we recommend that you consult and keep in mind.

Let us start by clarifying the basics, what is a car loan? The Bank of Mexico (Banxico) defines it as a loan through which a bank or financial institution lends customers an amount to purchase a car. The debtor is obliged to acquire the vehicle with this capital, to return the amount owed to him and to pay the interest agreed upon in the contract.

Currently, this type of credit can be used to buy a new or pre-owned car. Odetta is the first company in Mexico to offer this service to people who want to buy a used vehicle from another person on credit with additional benefits such as transaction safety and mechanical guarantees.

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Considering that there is currently a shortage of semiconductors to manufacture new cars, there is a lack of inventory of new vehicles, long waiting times for delivery, and high prices.

In the case of pre-owned cars, which have not decreased in value over the past 2 years, they are still more affordable than new cars; In addition, the post-purchase depreciation is significantly less compared to a new car from an auto dealer.

During this past year, the used car buying and selling market has taken significant strides to guarantee people reliable, simple and completely safe options, where technology has played a fundamental role.

,In Mexico, sales of used units have always been a market five to six times higher than new vehicles. As 85% of used car transactions are done between individuals, there is a commitment to expand the offer through a process that provides safety and confidence for people with Car Credit Choice amongst people”, Daniel Esponda, CEO of Odata, explains.

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Now, a car credit is a more flexible and faster way to buy a car, as the payments are divided into months (which can range from 36 to 72), with the initial payment known as a down payment, usually But it is about 20% of the total value of the car. So, although the amount is less than the cash payment, keep in mind that an initial investment will be necessary.

Last but not least, consult and be clear about interest rates, which are the “costs” you will pay to access this loan. There are institutions where the rate is fixed so you will pay it during the entire tenure of the credit. There are even options that offer preferential rates depending on the model of car you choose.

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