Car Finance , Leasing or Consortium , which is best for the consumer? In order to get a better idea of each type of financial transaction, we have listed some essential information about financing, consortium, individual leasing and also leasing for business.
Financing is an operation
To raise funds between a consumer and a financier, usually the financier is a banking institution or financial company. The financing provider lends money to the consumer to purchase a specific “asset” (Car, Property, Motorcycle, etc.) that is secured as collateral.
In car financing, the lender can apply to the principal amount, interest rates according to the amount financed and the term of payment. The financing is granted to both legal and natural persons in the acquisition of medium or large value goods. The most traditional means of payment is with carnet, but checks and debit in Checking Account are also accepted in some lines of credit.
Leasing . We can call this financial transaction “Leasing” or “Leasing”. Leasing is a type of contract where a lessor or leasing company has a property that the consumer (the lessee or lessee) wishes to acquire and, instead of buying it as in the financing, rents the Good for a period determined in a contractual agreement.
At the end of the “leasing contract” the consumer (lessee) chooses to renew it for another term or returns the Good to the Lessor. The video made by ” Your Money ” from the Exame explains this very well, check it out!
In Leasing , there is no tax on Financial Transactions (IOF), and you still have the option to purchase at the end of the contract. The deadlines can be chosen in up to 60 fixed months, with interest rates included. The payment of the parcels is done with carnet.
The Consortium is different from Leasing and Financing in all respects, the Consortium system functions as a scheduled and installable purchase of a Good.
The system is simple, a group of participants are organized through an administration company that apportion the value of the desired good by the number of months of installment of this good.
The Consortium can be classified as a meeting of individuals or legal entities closing a buying group managed by a company that manages the group, the objective is to provide members with the acquisition of the desired good or set of assets through self-financing .