Steps Learn How Used Car Financing Works

Steps Learn How Used Car Financing Works

In this article we discuss some Steps Learn How Used Car Financing Works. The cars combine the independence of public transport and the comfort of the individual displacements. But not all consumers have a budget to buy this autonomy. That’s why we’ve prepared this article to discuss how used car financing works.
Steps Learn How Used Car Financing Works

This is a subject that still generates curiosity in people, as they usually attribute the modality only to the acquisition of zero km vehicles. To resolve this issue once and for all, we have compiled the main information on the topic, explaining the possibility of funding and how to do it. Check out! Apply For Car Finance

Used Car Financing

Steps Learn How Used Car Financing Works

The first question to be eliminated: is it possible to finance used vehicles? Yes, dear reader! Financing is the most popular modality in the national market, precisely because of its flexibility in the settlement of the most varied goods and services. However, before embarking on a deal, it’s worth checking out how used car financing works .

The funding traditional, direct consumer credit (CDC), is basically a loan transaction. To illustrate our argument, we list the steps during this modality:

The consumer wants to buy a vehicle, but does not have the amount for its immediate discharge;

so he decides to finance;

the financing institution pays off the property with the shopkeeper;

the consumer has the vehicle registered in his CPF, but with ownership linked to the financing institution;

to avoid seizure of the good, the buyer must honor the installments defined in the contract.

Got it? Financing is the loan of an amount used to purchase a vehicle. That’s why this is a modality that requires planning, since every credit-taking operation involves some interest rate.

Because of this, there is one more important factor: this rate will always be proportional to the length of the period and the amount financed. See the examples:

R$20,000 over 24 months = lower fees;

R$45,000 over 60 months = higher rates.

That’s why the entry value is so important to ensure a good trade. In reality, most institutions do not allow full funding, but be aware that those that do will certainly charge for it.

In the background, we highlight leasing. This submodality follows the financing payment terms. However, it consists of the loan of the vehicle during the financed period. Compared to CDC, its differentials are:

lower interest rates and therefore cheaper installments;

impossibility of anticipating installments to expedite the settlement;

the asset is not in your name, but in the CNPJ of the financial institution;

impossibility of selling the vehicle during the contract, as it is not yours.

Step by step to carry out financing

Now that you know the basics of the modality, we can now proceed with the tutorial on how used car financing works. So that no point goes unnoticed, we’ve separated this mini-guide into 6 steps. Thus, we distribute the entire process in a clear, easy and detailed way. Follow up!

Step-by-Step: Learn How Used Car Financing Works

1. Research the market

This step is valid for both the search for financial institutions and the ideal vehicle, in addition to being essential for you to understand how financing works. So, enjoy the time while you are not committed to any contract: research and compare to exhaustion! After all, the best way to avoid post-purchase regret is to make sure you make the best possible choice.

As for the vehicle, we recommend that you filter your alternatives with those with a maximum of 10 years of manufacture. This is a minimum requirement for many institutions and many banks to release the contract. 

2. Consider the best modality

Here, you will need to make the final decision between CDC or leasing . In general, the CDC is the most selected option, both because of its greater availability in institutions and because of the immediate possession of the car.

3. Compare the conditions

This is a time to “roll up your sleeves” and look for the specifications of each of the companies in the market and understand how financing works. During this research, you should focus your attention on four questions:

the deadline for payment;

the maximum amount financed;

the interest rate charged;

certification of the best option.

It is essential that you confront your certainties with these questions, eliminating options that are harmful to your budget. As an example, we list the conditions of some institutions known in the segment. 

Bank of Brazil

maximum term: 60 months;

maximum financed amount: 100%.

Bradesco

maximum term: 60 months;

maximum amount financed: 70%.

Federal Savings Bank

maximum term: 60 months;

maximum amount financed: 80%.

Santander

maximum term: 60 months;

maximum financed amount: 100%.

We cannot score interest rates as, as we explained, they vary according to your contract specifications. In addition to the aforementioned banks, it is worth researching other participants in this market, such as financial institutions specific to the financing sector.

Ah, a good tip for getting better rates: look for terms at your main bank. Do you know that institution where you have had an account and have operated for many years? Well, depending on the history and relationship, a visit to your agency can earn you a special negotiation.

4. Simulate all scenarios

Gather the amounts, fees and information from institutions A, B, C and D. Then, use a calculator that simulates the financing, to identify the weight of this purchase over the contract months. For this purpose, we recommend two tools:

the Citizen’s Calculator , of the Central Bank of Brazil;

the virtual simulator on the pages of funding institutions.

5. Gather the documents

To start the acquisition, you will need those traditional identification documents and the like. Therefore, search and group in a folder:

CPF and RG;

proof of income;

proof of address.

6. Finance

There, dear reader! Now it’s “just run for the hug”, get the new car and celebrate this new achievement. Finally, here’s an important comment: note that this tutorial was intended to simplify this procedure for first-time consumers.

But it is essential that you plan your acquisition, recognizing expenses parallel to the financing installments, such as any insurance, supplies, maintenance and the like. Even because the ultimate goal is to buy a car to make your daily life easier, without hurting your budget.

Thus, we understand that buying used cars is one of the best alternatives in the national market. After all, these vehicles have already gone through the roughest period of devaluation and, when well maintained, have the durability and competence to take you wherever you go.

However, you need to pay attention to one last point: find a quality and reputable company that sells cars in this condition without posing any risk to your dream! Car Financing Works

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