One of the most common purposes of many Mexicans at the close or beginning of the year is to buy a car. Whether it is for the family, going to work, to help in your business or whatever the reason, thousands of people dream of the moment of finally getting their car.
One of the most common ways to acquire a vehicle is through a car loan, but like any other financing, before hiring it you must look at some points to see if that loan really suits your pocket.
Interest rate, associated commissions, Total Annual Cost (CAT) and even the insurance related to the financing as well as the car model, are some of the points that should be reviewed prior to contracting this financial commitment.
Before signing a contract of this type, the first thing to do is to be aware of the commitment you are about to acquire, see if you have the income to pay the monthly payment of the car and make accounts of how much you can contribute with the monthly payment to the credit, said Oscar Andrade , director of the automobile finance company OLX México.
In an interview, he explained that in addition to reviewing the interest rate, it is also necessary to consider the down payment for the vehicle, the associated commissions, as well as the insurance collection.
In the case of the interest rate, this indicator can vary for different reasons such as that the down payment given by the buyer is higher or is contracted for a longer term.
“For those who want to buy through credit at this time, the first recommendation is to focus on the liquidity of the person’s income,” he said.
Associated costs
When acquiring a vehicle come some associated costs and expenses around the financing such as an opening commission or the cost of insurance, such as unemployment or life, as well as some clauses or benefits that can also be linked.
To which he added: “you can see that each of the associated costs are adding and making financing more expensive.”
He indicated that these points are also important to compare them, since by having a cost and reviewing who offers the best conditions, you can save a few pesos while obtaining the best service for a single price.
Credit or car first?
Asked if it is first to review the type of loan or the car to buy, the expert pointed out that they go hand in hand: both investigating financing options as well as deciding on a particular model.
Another fundamental point is to review the type of vehicle that you want to acquire, since in the face of a wide range of models and prices, you should look for the one that best suits your needs and your portfolio; regularly the more space and components the car has is usually more cost.
The expert even recommended talking as a family to plan what type of credit is appropriate to buy the vehicle you want to purchase.
Take the hitch into account
The down payment can also be a determining factor for the type of car credit to request. In the words of the director of OLX Autos, the higher the capital contribution or the higher the down payment, the credit conditions may be more favorable.
“If the client can give 20 or 25% down payment and in six months he has money, he will always be able to make capital contributions to reduce his monthly payments or reduce the debt,” he said.
Reference-www.eleconomista.com.mx