Make a consortium of cars worth it or would it be better for a financing? This is the question of many when it comes to acquiring this new good or changing the old model. The truth is that this question does not have a right answer. The two options have their advantages and disadvantages, and each case must be carefully considered to make the best decision.
That’s why we’ve prepared a guide today to show you when it’s best to get a consortium or funding and help you make your choice!
But after all, how does the consortium work?
The consortium of cars, contrary to what many people think, is not a form of investment, but a way to acquire the desired good. In this mode, a group of people come together to make a savings of a predetermined value – in the case of a car consortium, the value is relative to the purchase cost of a certain vehicle type.
This amount divided into a number of monthly installments paid to a company, which will be responsible for administering the money. A participant can be contemplated with the letter of credit in the value of the car in three moments:
- If it is raffled: the administrators make monthly draws among the participants to receive the letter before the end of the parcels;
- If a bid: the consortium offers auctions where the participant can offer the so-called bid, which is the payment of an advance amount. If the bid is the highest, it will be dealt with the card;
- At the end of the installments: all participants that have not been drawn or contemplated by the bid, will receive, at the end of the installments, the letter of credit in the value of the vehicle.
In the case of the consortium, we can not be sure when we can get the good. If you’ve hired a 75-month program, for example, you might have to wait all this time to get your new car. However, in a consortium no interest is charged, there being only a management fee paid to the management company, which is around 20% of the total amount paid.
Consortium x Financing
The financing also works through the monthly payment of installments of the value of the vehicle purchased. In this case, we received the car at the time of hiring this modality. However, this comes with an extra cost: the financing charges high interest rates, and in some cases, it is necessary to pay a fee. Banks usually do credit analysis, and may or may not grant the loan to the applicant.
Without doubt the consortium of cars is worth
For those who can wait and want to escape the interest, without doubt the consortium of cars is worth. The financial cost is lower in this modality and it is a good option for those who want to save and have difficulties. However, if you need the vehicle on time and you have a down payment (like the value of selling an old car), financing is the right way!
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