Paying attention to car financing interest is a basic prerequisite for those who want to purchase a vehicle and ensure the best conditions in the market. The good news is that the current scenario is very conducive to this, with Selic at its lowest level in history and access to credit facilitated.
Still, some care is needed. Comparing values and searching for institutions that offer lower rates are smart measures, as we’ll detail throughout this article. car loans
What is Car financing interest?
Car financing interest is the rate applied by financial institutions when lending money to customers for the purchase of new and used vehicles .
These rates vary according to the bank, the term of the transaction and the model adopted. There are basically three types of auto finance.
The most common is the Direct Consumer Credit (CDC) , in which the person communicates their interest in buying a car and the manager makes a simulation based on the customer’s income.
Another option is leasing , in which the vehicle is rented by a specialized company, which transfers the operation to the contracting party with the possibility of purchasing it.
Finally, Car financing interest we have the consortium , in which the client joins other interested parties and, through an administrator, participates in the group by paying monthly installments.
In this case, there are two chances of being awarded: when you are drawn or by placing a higher bid (advance of the installments to be won). However, it is important to note that the syndicate does not involve charging interest but may include an administration fee .
Rates on car financing, according to BC
With the exception of the consortium, for the reason already explained, all other car financing options have their rates available for consultation on the Central Bank website , in the Statistics > Interest Rate tab .
The tool is very useful for you to research and compare the best deal terms to buy a car.
This analysis is valid because there may be a significant variation in values between institutions. To give you an idea, in the vehicle acquisition category , the difference between the most affordable and the most expensive annual rate is 47.9%.
In terms of vehicle leasing , there is only one institution listed by the Central Bank : BBC Leasing, which offers a rate of 1.94% per month and 25.95% per year.
Average rates at the largest banks in the country and Car financing interest
To make your search even easier, we’ve compiled the average car finance rates from six of the top national banks .
Institution Interest rate (%) per month Interest rate (%) per year
Bank of Brazil 1.19 15.30
Itaú Unibanco 1.22 15.65
Bradesco 1.24 15.99
Harvest 1.34 17.35
Santander 1.41 18.22
Federal Savings Bank 1.50 19.63
How much can you save with interest
In this scenario, Car financing interest among the listed institutions , Banco do Brasil is the one with the lowest rates for financing vehicles and Caixa Econômica Federal the highest.
But how much would your savings be with interest if you opt for the bank with the best conditions compared to the one that offers the highest rates?
We did a simulation in the Citizen’s Calculator to finance a car in the amount of R$35,000, to be paid off in 48 months.
In the statement made with data from Banco do Brasil, using the rate of 1.19% per month, the total amount of the financing was R$ 46,114.80, with fixed installments of R$ 961.35 and a total interest of BRL 11,114.80 .
In the test carried out with information from Caixa Econômica Federal, using the rate of 1.50% per month – see that, looking at it, the difference may seem insignificant -, the amount of financing was R$ 49,350.24, with installments fixed rates of R$1,028.13 and a total interest of R$14,350.24 .
Therefore, based on this simulation, you would save BRL 3,235.44 in interest by opting for financing from Banco do Brasil.
But the savings could get even bigger . When you include in your comparison all banks and financial institutions listed by BC, you will find Banco Mercedes-Benz SA with the lowest rate (0.74% per month and 9.23% per year), while Omni Banco SA has the most high (3.83% per month and 56.99% per year).
Applying the same example to the extremes of the BC list, the result is: the total interest paid varies between R$6,711.52 (Banco Mercedes-Benz SA) and R$42,024.16 (Omni Banco SA). In other words, an incredible difference of R$35,312.64 .How to finance a car with lower interest rates?
There’s no way! For you to finance a vehicle with lower interest, you need to research the conditions offered by different financial institutions. Consulting the BC website is a good start, but it is also worth checking the official websites of banks and accredited companies. https://www.halifax.co.uk/car-finance.html
An important piece of information to be collected is the total effective cost (CET) of the operation, which details the other expenses, such as administrative fees, taxes, compulsory, among others.