Are you thinking about buying a motorcycle or trading the one you have? So we can guess the question that is going through your mind right now: do a motorcycle consortium or finance? This is a very common issue when the need arises to purchase a vehicle.
Both modalities are very common in Brazil and have advantages and disadvantages. Answering this question can be quite difficult but we are here to help with this challenge! How about finding out all the information you need to make this decision? Read this post and clarify your doubts once and for all!
How does financing work?
Simply put, financing is basically a loan that you ask from the bank or financial institution. They offer the money for the vehicle purchase, you make the purchase and pay this amount back with the addition of the interest rate.
However, you need to be aware of some details involved in this transaction. One is credit analysis: Before lending the money, the bank evaluates the order based on the person’s consumption and payment profile. Criteria for this phase may vary by a financial institution. Therefore it is important to be informed and research.
Another relevant detail to understand how financing works is the interest rate. It also depends on the rules adopted by the bank and may report to consumer profile analysis. Interest in a purchase risk making the final payment much higher. So it is worth evaluating this carefully before deciding.
In addition to these, one more point present in a loan is the down payment amount: an amount of money given early on. Generally, financial institutions ask about 20% of the value of the asset to release the credit.
Now you know how financing works. Who makes one has the advantage of buying the vehicle immediately. However, you are acquiring debt with the bank, so you need to evaluate if this alternative is best for you.
What is the operation of the consortium?
The question about whether to make a motorcycle consortium or finance is very common because, although they seem similar, the two modalities are quite different. Did you notice that we talk about debt when we talk about financing? Here’s the first big difference: In the consortium, you don’t get a debt but save money.
It works as follows: A consortium management company offers various plans and brings together people with a common goal. This will allow you to join a group with others interested in buying a motorcycle. Each will pay the amount corresponding to their monthly installment.
With the sum of the payments of all members, the group builds a common fund that allows contemplations. These contemplations happen through raffles. Raffled participants have access to the letter of credit and can purchase the goods. In addition, there is a way to anticipate this process: bidding.
A bid is a value that the consortium bid corresponds to the advance payment of a certain number of installments. In general, the highest bidder is awarded. Please note that payment is only required if your bid is the winner.
A striking difference between the two modalities is that the consortium does not require an entry fee or interest. What is there is the administration fee – which is the amount charged by the company that organizes the consortium and is generally much lower than the interest charged by banks.
In addition, the consortium offers consumers more freedom to choose the plan according to their financial possibilities. That is, the companies have several plans and it is up to the customer to choose the amount of credit and installments, as well as the term for payment, which best suits your budget.
How to choose between motorcycle consortium or financing?
Now that you know the basic workings of the two options, let’s talk a little more about choosing. Considering the information we have given so far, we can see that each option has different characteristics. Thus, the choice between them depends on the needs and possibilities of each person.
To be able to decide between the two alternatives, it is important to assess the advantages and disadvantages of each. Always remembering to report to what you need. Here are some things that deserve attention before deciding how to buy your motorcycle.
Deadline to have the vehicle
An important point in the analysis between consortium and financing is the deadline to be with the bike. So you might think: do I need the vehicle right now or can I wait a while before I have it in hand? If the answer is the first option, financing is the most appropriate as the vehicle can be purchased immediately.
Meanwhile, the consortium is a good option for those who can wait a little longer, as it is necessary to wait for contemplation. This is the case, for example, who is changing vehicles and is not in such a hurry to receive the new.
These are points of much difference between the consortium and the funding. Those who choose the second pay an interest rate, which depends on the financial analysis, the amount of the input and the number of installments. Since the consortium does not charge interest, what exists is the administration fee. It is a fixed percentage on the letter of credit, diluted in the months of the consortium and usually has a much more affordable value.
An important point to consider on having financing
Another important point to consider when deciding is the input value. In financing, most financial institutions require the buyer to have at least 20% of the value of the desired asset as input. In this sense, the consortium is differentiated by offering a relevant advantage: the possibility to better organize the budget. This is because there is no entry fee. Therefore, the consumer does not need to offer high capital to acquire the consortium.
When deciding between the two, be aware of your financial possibilities, the wrong choices can lead to budget imbalance or even debt. Regardless of which modality you choose, always try to ensure that the value of the installments fits in your pocket without major difficulties.
With our information it is much easier to decide between motorcycle consortium or financing, right? We list the main advantages and disadvantages of each option. Thus, you can choose the best way to take your vehicle home.
So, do you want to keep thinking about this subject? We have other very interesting material: see our infographic comparing the consortium and the funding!