This type of loan is granted fundamentally for the purchase of 0 km or used vehicles, and it works as follows: the good acquired from the financing, in this case a car, is “pledged” in favor of the entity that grants the credit as collateral, until its total cancellation. During this period, the borrower is prevented from selling the vehicle until all the installments are paid.
But the strong upward trend in pledged loans continued last January: the line reached a nominal record of $250,822 million, reflecting an expansion for the twentieth consecutive month, with a growth of 5.4% monthly, and 123.2% year-on-year. “Within the moderate tone that has marked the month’s activity, it stands out the dynamism that pledges present, even in a month with closures derived from the Ómicron variant”, explained Guillermo Barbero, partner of First Capital Group.
In the first month of the year, there were 22,766 garments, the highest figure since August 2019, according to the Association of Automotive Dealers of the Argentine Republic (ACARA). Of that total, 16,274 correspond to Garments on new vehicles (71.5%), while the remaining 6,492 refer to used vehicles (28.5%). Although savings plans continue to be the most used instrument to finance vehicle purchases, banks and brand finance companies are expanding their role and already represent almost half of total operations (0 km + used), they affirmed from ACARA.
“The consumer is perceiving that the vehicles are cheap measured in dollar counted with liquidation or MEP, and prices in pesos do not replicate the rise in the parallel dollar. In addition, given the impossibility of many to buy official dollars, along with all the difficulties that exist to save, people choose to make a change of vehicle, and that is where many opt for these credits “Barbero commented to Ambit.
But also, the car companies “They have very good offers of 0 km with garments, so when you go to buy a vehicle they tell you ‘stretch a little more, get a garment and go to a more complete or taller model’”completed partner of First Capital Group.
Martin Solano, CEO of Santander Consumer Argentina, told this medium that “In 2021, we sold more than 26,000 pledge loans, multiplying by 2.6 times what was financed in 2020, in the midst of a pandemic. We hope to start this year with the same dynamism as in recent months, and continue our growth path”. The bank’s pledge portfolio amounts to $39.5 billion as of December 2021 and represents 8% of its total loan portfolio in pesos, while the types of vehicles it finances the most are used cars, a segment in which the entity is the leader.
For its part, Marcelo Lopreato, chief pledger of survivenoted that “The placement of pledges of the entity in 2021 grew by nearly 15% compared to the previous year, in terms of retail financing.” However, he made it clear that “The lack of 0 km units and the increase in the price of used cars had an impact on the level of placement, but we are seeing a rebound during the month of February. We have expectations of doubling our level of placement, leveraged in several commercial agreements”. At the end of 2021, Grupo Supervielle’s market share in retail financing “was 8% in used cars and 7.1% adding 0 km.”
From HSBCmeanwhile, they noted that 2021 “was really very good in this segment: sales more than doubled compared to the previous year”. “2022 will be a very challenging year for the industry, but we have a good projection for the coming months. The market has been changing in recent months, with used vehicles becoming more relevant”, they added from the entity.
Lastly, from Credicoop pointed out that during the last year they registered “significant growth in collateralized loans compared to other lines of investment”. They consider that it is “an important tool for SMEs to finance the purchase of vehicles, machinery and other capital goods, which are essential to materialize their investment projects and contribute to the development of productive activity in our country.” They estimated that during this year “The growth of these lines that collaborate in the development of SMEs will continue, generating improvements in their competitiveness through the incorporation of capital goods and technological solutions”.
How to buy a car with pledge credit and what each bank offers
Santander
-Steps to follow to obtain a pledge loan: 1. Approach the point of sale (either branch or dealer) or through the bank’s website www.santander.com.ar in the pledge loans section. 2. Perform a credit simulation showing 10 personal data (basic). Documentation of income is not required. 3. If it is favorable, select characteristics of the loan (amount, rate and term). 4. Define insurance coverage of the property according to the needs of the policyholder. 5. If used, collect the corresponding documentation (title or domain report). 6. Register an account (if you do not have one) where the loan will be settled and the installments will be debited. 7. Settlement
-Types of vehicles that can be financed: from cars, utility vehicles, trucks, agricultural machinery, to mid-range and high-end motorcycles. The bank operates with most of the official dealerships, as well as with a large number of multi-brand dealerships. It has agreements on the financing of heavy vehicles, with almost all the leading brands in the market: Iveco, Volvo, Scania, VW. It also has more than 25 agreements in the agricultural segment.
-Maximum credit amount: up to $4.3 million for automobiles (minimum $120,000); and up to $9.9 million for trucks. Finance up to 85% of the value of the unit.
-Rate: financial inclusion line, from 26% TNA; traditional general line, with a fixed rate in pesos, from 44.5% TNA; General UVA line, with a fixed rate in pesos, from 12.5% TNA. -Example of installments for a credit of $750,000, with a term of 60 months (the value of the installment includes VAT on interest, does not include insurance on the property): financial inclusion line, average installment from $24,546; general traditional line, average fee from $35,294; UVA line, initial fee from $21,575 (calculated up to 48 months).
-Term: traditional general fixed line in pesos (includes financial inclusion) up to 60 months; UVA line up to 48 months.
-Requirements: DNI with permanent Argentine residence and proof of CUIT/CUIL; declarative income greater than $40,000 (supporting documentation will not be requested); in case of used vehicle, title or domain report and police verification (in case of branch)
-Commission for early cancellation: 5% + VAT (the commission will only be applied when at the time of cancellation at least a quarter of the original term of the loan has not elapsed or 180 days from its granting, whichever is greater).
BBVA Bank
-Types of vehicles: combustion and hybrid cars through its extensive network of dealerships with its alliances with Volkswagen, Renault and Stellantis, being the leader in the sector with a 42% share in 0km. In turn, it has alliances with Grupo Simpa, Iraola and La Emilia for the financing of combustion and electric motorcycles. Used cars 8 years old.
-Maximum amount: $4 million. Finance up to 80% of the value of the vehicle.
-Rate: fixed, from 42% to 49% TNA, with French amortization system. No interest in motorcycles.
-Deadlines: up to 60 months. Granting from 24 hours. just by presenting your ID.
-Requirements: from 18 years; Minimum required seniority: 1 year dependency relationship and 2 years self-employed. Total fee/monthly net income ratio: 40%.
-Commission for early cancellation. Partial: 5%+ VAT on debt balance (6.05% VAT included). Total: if 180 days or 25% of the agreed term has elapsed (of both, the greater), 0% (free of charge). If 180 days or 25% of the agreed term (of both, the greater) have not elapsed, 5% + VAT on the debt balance (6.05% VAT included).
Bench Supervielle
-Steps to follow: The Vertical Rodados of the Supervielle Group offers the possibility of granting a Pledged Credit by different means. Thanks to the link with more than 500 dealerships, agencies and multi-brands throughout the country, the customer can request the credit right there once the unit to be purchased has been chosen. Also, you can go to any of the Bank’s branches and, soon, by downloading a specially developed APP, you will be able to request it digitally through a completely paperless procedure.
-Types of vehicles: 0 km or used up to 15 years old. Since December, it has had a strategic alliance with Kavak, a leading platform for buying and selling semi-new cars in Latin America, through which it offers financial services and benefits for the company and its customers. In this way, those who wish can buy a vehicle with an initial contribution and finance the rest of the amount through a pledge loan granted by Supervielle.
-Maximum amount: $4,375,000 to finance the vehicle, or up to 75% of its value.
-Rate: fixed and in pesos, which will depend on the year of the vehicle and the term.
-Term: up to 60 installments.
-Requirements: present DNI and a service in the name of the applicant; Declared income: be between 21 and 75 years old.
-Commission for early cancellation: 4%.
HSBC Bank
-Steps to follow: those interested can go directly to the wide network of dealers that operate with HSBC throughout the country, the complete list can be found on our public site www.hsbc.com.ar in the pledge loans section. For those who prefer, they can go directly to our public site, pledge loans section and enter the “Quote now” option to obtain a credit pre-approval at the moment to know up to what amount the bank can lend to buy or change the vehicle. The process is very simple and approval is online.
-Types of vehicles: cars and pick ups for private use; light vehicles for commercial use; hybrid/electric vehicles.
-Maximum amount: $6.3 million, depending on the value of the vehicle and the age. Finance up to 80% of the value of the unit.
-Fees: It depends on the vehicle to acquire and the term of financing. For example, for 0 km and used up to 2 years old, it offers fixed rates from 38.5% TNA. The financial inclusion line is also available with special fixed rates from 25%.
-Term: from 12 to 60 months.
-Requirements: DNI and presentation of a public service.
-Commission for early cancellation. Total: 5% + VAT on the balance of the debt to be cancelled. Commissions are not charged when at the time of making the pre-cancellation, at least a quarter of the original financing term has elapsed, or 180 calendar days from its granting, whichever is greater.
Credicoop Bank
-Types of vehicles: automobiles for common use, utility vehicles, machinery and other capital goods, which are essential to materialize their investment projects and contribute to the development of the country’s productive activity. In that sense, it has multiple agreements.
-Fees: fixed, variable or mixed and with different attributes depending on the needs and characteristics of the companies.
-Deadlines: up to 60 months.
city Bank
-Types of vehicles: 0 km taxis, with or without CNG equipment, aimed at taxi license holders in the City of Buenos Aires.
-Maximum amount: $1,000,000. Finance up to 80% of the value of the proforma invoice.
-Term: up to 48 months.
-Rate: fixed 37% TNA
-Requirements. Fee-to-income ratio: up to 30% of the applicant’s net income
Banco Ciudad also has personal loans, which can be applied to the purchase of automobiles. The financing of the City is up to 3 million pesos and the maximum term of up to 72 months, with fixed rates from 43% (TNA).
Source: Ambito
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