Used car financing: learn all about how it works

Is it possible to finance a used car?

To that first question, our answer is straightforward: yes, dear reader! Financing is undoubtedly the most popular modality in the domestic market, precisely because of its flexibility in the discharge of the most varied goods and services. However, before embarking on a deal, it is worth checking out how used car financing works.

O financing traditional, Direct Consumer Credit (CDC), is basically a loan operation. Just 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 immediate settlement;
• so he decides to finance;
• the financing institution settles the good with the shopkeeper;
• finally, the consumer has the vehicle registered in his CPF, but with ownership linked to the financing institution;
• to avoid seizure of the asset, the buyer must honor the installments defined in the contract.

Do you understand? Financing is the loan of a value, used in the purchase of a vehicle. That's why this is a modality that, in fact, requires planning, since every credit operation implies 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 amount financed. See the examples:

• R$ 20k over 24 months = lower rates;
• R$ 45k over 60 months = higher rates.

That's why the input value is so important to ensure a good deal. 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 the leasing. This sub-modality follows the financing settlement model. However, it consists of vehicle loan during the financed period. Compared to the CDC, its differentials are:

• lower interest rates and therefore cheaper installments;
• impossibility of anticipating the installments to speed up the discharge;
• the good 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.