Do you want to apply for a vehicle loan? We tell you everything you need to know

To make this possible, the concessionaires or financial entities review the customer’s credit information, for this reason it is important that you maintain a good track record to be subject to this product. The have a score credit implies that the person honors their debts, that is, avoids falling into default.

José Ricaurte, vice president of Produbanco Retail Banking, explains that there is currently interest in acquiring light and heavy vehicles, figures that are evident in the Ecuadorian market. According to information from AEADE (Association of Automotive Companies of Ecuador), Between January and July 2022, close to 77,171 units (light and heavy) have been sold, which means a growth of 18% compared to the same period in 2021 and 89% more than in 2020.

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“The country went through a pandemic and stoppages that have affected the normal commercial and economic course. However, in the last year there has been a significant economic reactivation (…) We feel a significant demand for automotive credit and we have the appetite for placement of this type of credit operations, ”says Ricaurte.

Something very important before financing the car through a loan is determine how long the vehicle will be paid for, which in most financial institutions can be up to five years. But It is better not to spend three or four years due to interest and depreciation of the car.

Also remember that the higher the entry and the shorter the term, the final price is reduced. Currently, interest rates in banks range between 11.50% and 15.60% and are defined according to market conditions.

To access a credit, you must have between 20% and 35% as an entry or initial payment. As an example, taking these percentages, let’s calculate that for a $21,000 car, at least $4,200 (20%) will be paid off and the remaining $16,800 will be financed (not including insurance and tracking device). If it is programmed for five years, the interest would be $7,712.60 and the final cost would reach $28,712.60. If the debt is for three years, the interest would be $4,462.97.

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The interest rate may vary from one financial institution to another, do not stay with the first consultation. There are dealerships that offer direct credit with a lower interest ratebut regularly their terms do not exceed two years.

In the case of Chery, for example, direct credit applies with the payment of 30% down payment and 70% with credithowever, this alternative represents an additional option. According to Christian Cazar, deputy manager of the Chery brand, customers take more advantage of bank and consumer credit. The interest rate in this case goes from 9.9%, through the identity card they make a check in the credit bureau to find out if the client is subject to credit and what type he can access.

Credit approval is immediate, less than 24 hoursfrom there the rigorous paperwork begins, entrance payment, registration payment, insurance payment and others, once that is completed within a period of two weeks the vehicle is delivered if it was purchased on credit and in a week if it is purchased in cash.

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Secondly, If you have part of the money in cash and you are a member or retiree, you can access an unsecured loan, this is a good option too. It is indebted to the Biess at a rate of 11% (13 and 48 months for affiliates and 60 months for retirees).

Here are some of the tips that you can keep in mind before making the decision:

• Look for financial entities specialized in granting loans and credits for vehicles, sometimes the dealerships have agreements with them and present lower rates.
• Provide an entry for the acquisition of a vehicle and with this the value of the credit is reduced. A common mistake is to finance the entry as well.
• The vehicle can also be financed in cash, through credits granted by some of the savings and credit cooperatives.
• Finance the credit in less than the maximum time, if your economy allows it.
• Before applying for the loan, know the amount of the monthly installments and that these do not exceed more than 15% of your income, since the vehicle also entails other expenses such as gasoline consumption and maintenance. (YO)