Everything you need to know about Automotive Credit
An Auto Credit is a type of loan that finances the acquisition of a car or a van, whether it is new, semi-new or used. It can be paid in monthly installments (from 6 to 60, mostly), depending on the amount and the client’s ability to pay. Also included are interest (generally fixed rate, but there is also a variable rate) and expenses derived from the operation.
The down payment is usually not less than 20% of the value of the vehicle. It can be obtained from a bank or from any dealer.
The particular brand or from the Financial Companies
When the Automotive Credit starts, a commission is charged and the client is asked for an amount (percentage) of the vehicle’s value as an advance. An endorsement or guarantee is also requested to answer for the owner. The account executive investigates the borrower to see if he has a good credit history and, also, if he has the ability to pay. The income that must be demonstrated will be three times greater than the amount of the fee. Certificates of residence, length of work, identification and salary payments are also presented.
Once all this is correct and the Automotive Credit is approved, the contract is drawn up, which establishes the conditions, obligations and rights of both parties. For example: monthly payments, if the vehicle is purchased when the loan is liquidated or delivered before (at a certain fee), the down payment (value or percentage), the financing period, the value of the installments.
If they are variable or fixed and how to proceed in case of lateness
The advantages of this type of credit is that it is presented as an alternative to be able to buy a car when you do not have enough money, the outlay is less at the beginning, the insurance is included in the installments, generally, and the car is liquidated little by little with monthly payments. Some of the disadvantages are that a debt is acquired, interest, commissions and expenses are paid; Proof of income is essential and you access a part of the amount.
So you must have saved a percentage before requesting it
The best way not to overpay with this type of Credits is to quote or simulate them before hiring. For that there is Compare, which allows you to simulate your Automotive Credit totally free and without leaving home. Enter your data into our Automotive Credit Simulator and get the best help for your new vehicle.