Having a car is the dream of many families. Really, a car can make life and everyday life a lot easier. Mainly for those who live far from work. And even to carry out leisure activities. In fact, even those who live alone are also starting to save money for a car. In the end, having a vehicle is synonymous with independence. But with vehicle prices so high, it can get difficult. That's why there is financing. In this article, we will explain everything about calculating vehicle financing.

Continue reading and understand better how it works!

In short, financing a vehicle is nothing more than a loan. But financing usually already has the objective of what will be done with the money. Usually it is an asset, such as a car or a house. So, you go to the bank with the amount you need and the bank grants you a loan for exactly the same amount. However, the amount is paid directly to the seller. That's the small difference.

This way, the bank receives the money with the installments that the customer will pay. All this with interest added. In this sense, financing is widely used by those who want to have an asset, but do not yet have the full amount of money. This is because in financing, it is common to already have a down payment. This amount reduces financing and, consequently, installments and interest.

It is worth mentioning that issues such as: amount financed, interest rates, payment period, amount paid in installments, all of this depends on the financial institution contracted. Therefore, you must consider all of this before calculating vehicle financing.

Firstly, credit analysis is the initial step in starting vehicle financing. Basically, it's the moment when the financial institution analyzes your profile to understand whether it can give you credit. In this sense, people with a bad financial history or low score may be able to obtain lower amounts or even not be approved.

In this sense, credit approval largely depends on your relationship with the bank. If you already have a good relationship and pay bills on time, there is a good chance of being approved. Typically, the value of the vehicle may even exceed the amount available for financing. In cases like this, it is possible to request an increase in the credit provided by the institution.

Furthermore, as we mentioned, it is very common to make a down payment before starting the financing. This happens because the bank rarely finances 100% of the vehicle's value. Therefore, the higher the value of your entry, the better.

In short, it is difficult to quote a specific number for the ideal score for financing a vehicle. In general, institutions look for people with a good paying history and even invested amounts. However, if your score is at least 700, the chances of getting financing are great.

In fact, if your score is very high, there is even a chance of getting financing for the entire value of the car. Furthermore, a good solution if your score is low is to have a good entry value. The lower your score, the lower your credit worthiness. Therefore, with a down payment you may be able to finance the entire car.

If your score is low, consider increasing it before financing the car. For example, clear your name, pay previous debts and keep your registration up to date. These are all ways to try to increase your score.

At first glance, it is difficult for a bank to finance the vehicle without any down payment. Normally, financing is always done with a value to be deducted from the financing itself. It largely depends on your history as a payer and also on your score. 

It's worth talking to the financial institution you chose to understand the conditions. In addition to finding out if it is really possible to finance the car without a down payment. All of this can make it easier when calculating vehicle financing.

Firstly, to calculate financing for a vehicle, you need to know the types of financing. We'll show you some below.

In short, with Consumer Credit, the customer requests financing from the bank. During financing, the asset already belongs to the buyer, but is sold to the bank. In other words, if payment is not made on time, the person still has a chance of losing the asset. 

Furthermore, this form of credit is common, as it still allows you to sell the vehicle in the middle of financing. However, it will be necessary to transfer the financing to the new buyer. Furthermore, the car only ceases to belong to the original buyer after the financing has been paid in full.

Furthermore, in this modality the interest value increases depending on the installments. In other words, the longer it takes to pay, the more interest will rise. In this way, many customers choose to amortize the debt, in other words, advance the installments. This way, you pay less interest, as you will release that amount to the bank. 

With Leasing, the process is a little different. In this modality, the buyer makes a type of rent. This way, you pay monthly installments to the seller. Typically, installments are cheaper than at CDC. However, this only happens because at the end of the financing it is still necessary to pay some other documents.

In this sense, Leasing is a highly sought after form of credit for those who change cars a lot. Because the Detran transfer document, the Gravame, is only written off at the end of payment. Furthermore, in this modality, advance installments are not as advantageous. 

Finally, to calculate vehicle financing you need to know the contracted modality, the interest rates, the value of the vehicle and also the down payment value. With this information, you can already have an idea of how much the installments will be.

Furthermore, there are several websites that perform the calculation for you. Tools often ask for this same information to calculate. Furthermore, it is usually possible to carry out the simulation directly with the financial institution.

So, now that you know how to calculate your financing, see this other article. In it we explain what a vehicle consortium is and how it works. Check out!