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The dream of many Brazilians is to buy their first car, or even trade in a newer model, but we know that high costs are a major impediment to making this purchase.
One of the quickest solutions is to try to get vehicle financing approved, but it's not always simple either, as there are so many criteria and sometimes the abusive interest rates are enough to make you give up.
Therefore, we have separated some tips here to help you get approval for your credit to buy or change cars, explaining the criteria and also the institutions that do a fair job in this competitive market.
Happy reading.
After all, how long does it take to get vehicle financing approved?
The credit analysis for vehicle financing approval usually takes an average of 45 days to be completed, depending on the applicant's situation.
You will see in today's article that several criteria are adopted by each financial institution, and some may be more rigorous, while others choose to seek external guarantees, such as guarantors, for example.
Generally, if the candidate already meets all the criteria and has a good relationship with the institution, the approval is much faster, so it is always best to have everything up to date before requesting.
What criteria are used to assess the approval of vehicle financing?
Again, the approval of vehicle financing and the criteria will vary greatly from institution to institution.
If you have had a bank account for a long time, generate a good income, have a good relationship with management, etc., your assessment will be much less rigorous.
Now, when it is a young person, in their first job, with a low score, the analysis will be much more complicated and to apply for approval, it will be necessary to meet a good part of the criteria that we will list below.
Income
We are talking about financing a car, which is a high-value asset, which, added to the interest rate, results in a significant monthly payment.
Therefore, it is essential to have a monthly income that covers this amount well, and that you can prove, through pay slips, or income tax declaration for the case of self-employed workers.
However, income is just one of the criteria, especially because the financial institution knows that you may eventually lose your job, for example, before the end of the installments.
Vehicle brand
The vehicle's brand is not only decisive for its value, but is also a criterion that determines its useful life, that is, depending on the brand, maintenance may be higher or lower, and these expenses added to the monthly payment may generate default in the eyes of banks.
Some brands are easier to approve than others, so it's a good idea to do some research beforehand.
Entry fee
Another criterion that helps a lot in the approval of vehicle financing is being able to make a good down payment, and this not only favors the analysis, it also has an impact on the interest rate depending on the value of this down payment.
The most recommended value is between 20% and 40% of the total value, but we know that depending on the car it can be very high, which is why many people use the option of selling something first.
In other words, if you want to exchange your current vehicle for a newer one, or even a zero-kilometer one, using your old car as a down payment can make it much easier to get your budget approved.
Vehicle year
The year of the vehicle has an impact on the final value of the vehicle, but also on its maintenance.
In the case of older cars, over 20 years old, they are exempt from IPTU, and this also has an impact.
However, when you take out a loan, during the installment payment period the car is the bank's collateral, and it is often not a good idea to have a very old vehicle under your management.
So, the ideal is to reach a balance, opting for a pre-owned item, but one that still has value to be the bank's guarantee.
Car value
Following on from the previous item, the value of the car implies exactly that, but it does not necessarily have to do with the year of manufacture.
A brand new model from a popular brand is much more affordable than a 10-year-old car from a luxury manufacturer, even so, for the institution, the higher the value, the more guarantees will be necessary to obtain approval for vehicle financing.
Financial history
In addition to current income, the entire history of the financing candidate is also considered, therefore, those who have already contracted large debts in the past, even if they have already been paid off, may be frowned upon by the institution when making an assessment.
The final idea for the bank is to have the maximum guarantee that you will be able to afford the monthly payments of the financing, and regarding this, we have more tips below.
Tips for ensuring vehicle financing approval
With this idea of having a good financial history, we will explain below what this means in practice:
Clean name
A clean name means not having a negative CPF, that is, not having high debts with any institution.
There are even lines of credit for those with bad credit, but they tend to be very low amounts, which don't allow you to buy a decent car.
High score
Score is the evaluation of your financial behavior on a scale from 0 to 1000, and to have a good level, you must first have a clean record.
It is possible to increase your score, but it is not something that happens overnight, as it depends on how you manage your money over a given period.
As a rule, the more bills you pay on time, the more your score will increase.
High entrance
An amount around 20% to 40% of the total price is a good way to ensure approval.
Especially when changing cars, this option is more interesting, as you can use the old vehicle to get a good down payment.
Favorable income
There is no exact ideal income value to guarantee approval, but in general, if the monthly financing payment is less than 30% of the candidate's monthly income, the chances of approval tend to be greater.
Conclusion
Getting vehicle financing approval can be a rigorous process, but it is possible. However, before you get approved, we recommend that you evaluate the available credit lines by researching several institutions.
This helps you get good credit and, most importantly, better interest rates, and Consulta Cred is ready to be your partner when it comes to finding the ideal financing.
Did you like the content? Read other articles on the subject on the Consulta Cred blog and our authors
