auto loan

Auto loan, What You should know before buying a new car

Improving certain aspects of daily life is a desire that most have; satisfying their tastes is an incentive
to continue working hard. An action that many want, either out of necessity or simply for their own
satisfaction, is the purchase of a car; If you want to do this through an auto loan, it is important that
you know what to consider. You can use this financing to purchase both a new and used car.

What is an Auto Loan?

An automobile loan is financing provided by a bank, a car agency, a Car Dealership without a credit check and no money down or a specialized corporation for the purchase of a car.
Acquiring it implies paying the car gradually with determined annual interest. To access this credit,
you must pay a down payment, which is an average of 20% of the total value of the vehicle (said
the minimum percentage varies from institution to institution and even, depending on the automaker
you choose). The rest is settled in monthly payments, which are determined by the amount of the
down payment you have paid, the term you choose (can range from six to 60 months) and the
insurance you will need (auto or life).

The requirement to get an auto loan in 2020

The National Commission for the Protection and Defence of Users of Financial Services (Condusef)
reported that in order for a bank to be able to grant it a loan, it usually evaluates the type of client it
is (it can be a natural person with business activity as well as a legal entity), depending on it, the
institution grants a type of product; Residential seniority is a term requested by the agency to avoid
possible fraud.
It also requests seniority (from one to two years at least), since the bank confirms that it can be held
responsible for a long-term credit; Age is also important, it is usually requested that you be between
21 and 65 years old, since it is the average range in which a person is actively working.
The last requirement is to check your minimum monthly income, with which the financial institution
verifies that you can meet your payments month by month.
If you are looking for an auto loan and do not know which one to choose, Condusef advised that you
first, locate the financial institution that grants the product of your interest and knows the name of
the service that you will hire, thus avoiding confusion with some others with similar characteristics.
Other important aspects to consider are the maximum value of the vehicle (the limit amount of the
cost of the car that the financial institution will cover), the minimum amount of the credit (the
the minimum amount of money that will be granted) and the term (the time that you will be paying The
In order to have financially planned the acquisition of your vehicle through financing, it is important
that you know the interest rate you will have, the down payment you will have to give and the
commissions you will pay. It is recommended that you look for the financial product that best
matches your ability to pay, monthly income, and age. Review the commissions, restrictions, and
benefits it offers.

The Federal Consumer Protection Agency stressed that in this type of credit, in addition to
requesting the aforementioned documents, they frequently ask them to fill out an application; The
institution's staff will carry out an investigation into your financial situation and will inform you if it
is granted or not. In order to get an idea of ​​the money you are going to disburse, you can use the
simulators or comparators that are on the Internet, one of them is the Condusef, in which different
information options are shown, for example: what car can you buy with his salary, with whom he
pays less at the end of the loan, among others.
If you are considering the idea of ​​acquiring a car or replacing it with a better one by means of
credit, you should evaluate not only the options on the market but also the current situation in the
country. Until the beginning of the years, having a new or recent model car meant greater
advantages for driving; however, with contingency problems, vehicle circulation has been affected.
In this context, you could consider the idea of ​​obtaining such financing for a hybrid or electric
vehicle, these cars circulate daily regardless of government determinations.

Six points to consider before buying a car

1. Identify your needs. Before buying the car, consider what you will be using it for, as
otherwise, you are likely to buy one that does not fully satisfy you.
2. Have patience. The best buyer is not the one that spends the least, but the one that spends
the best. For this it is necessary to take some time to plan and compare, so you will make an
intelligent and responsible purchase.
3. Compare at least three different car dealers or brands. Often they all have lines of
automobiles that meet similar needs, and there may be significant price differences
between them.
4. Take your financial situation into account. You should be aware of how much you have and
how much you can spend.
5. Compare several options so you can choose the one that best suits your budget. The
apparently small payments are not always so, due to the interests that sometimes
accompany them.
6. If you are going to buy a new car, it may be worth waiting for the offers that agencies usually
make at the end of the year. So you can buy a car with practically all innovations at a lower
It is difficult for you to condition your purchase of another financial product when you go to apply
for your auto loan, so you can take out life and damage insurance with the insurer of your choice.
The National Commission for the Protection and Defence of Users of Financial Services reported that
the institutions will be able to offer alternatives for you to select with which insurer you will contract
your policy. Thus, you will be the one who decides the financial institution that best suits you to
contact the financial service or product you require, and you cannot be conditioned to do so with
any specific institution.

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