Top & Best Car Consortium Review 2022- How to Select Ultimate Buyer’s Guide
Car Consortium: Meet the Best of 2022
If you want to buy or exchange your car, the car consortium can be an excellent alternative. Want to know why? We will bring all the information to answer your doubts about this type of consortium.
There are consortia of the most varied types, and the car is one of the most sought after. Terms such as letter of credit, bidding and drawing are part of this type of deal and therefore you need to understand all the details before hiring one. Follow us.
First, the most important
- You can buy a new or used car using the letter of credit. And 10% of that amount can be used for other expenses, such as insurance and IPVA.
- Instead of charging interest, the car consortium has a management fee for the installments. This reduces the final price of the vehicle, as these fees are usually less than the interest charged.
- To enter a car consortium you must choose the administrator. From there you can join a group in progress or be part of a group in formation, which is a closed group with a minimum number of members.
Car Consortium: Different plans for your choice
The administrator needs to be authorized by the Central Bank to carry out the car consortium. Check out some of the best options below:
- Administrator specialized in car consortium
- One of the largest administrators in the country
- Vehicle consortium with the lowest administrative fee
- Car pool with low installments
Hiring Guide: What you need to know about the car consortium
For those looking for a car consortium for the first time, it can be quite complex to understand how this type of negotiation works. Thinking to facilitate this understanding, we created this Guide to answer the most frequent questions. Follow us through to the end to decide if the consortium is the best option for you.
What is a car consortium and how does it work?
The car consortium is carried out by an administrator, which brings together a minimum number of people with common interests, in this case, buying a vehicle.
With this meeting of people, a calculation is made so that together, they pay the total value of a car per month. In this way, the administrator can draw a vehicle monthly, benefiting one of the consortium members.
Everyone will be drawn at some point, but it is important to keep in mind that you can be both the first and the last. Therefore, it is a long-term investment. You will not have your car right away, as in a loan.
Is there an interest rate on the car consortium?
No, unless you delay the parcel. But interest is not applied to define their value and increase the value of the car at the end of the consortium.
What exists is the installment management fee, which is nothing more than the remuneration that the administrator earns for guaranteeing the car consortium for the consortium member.
It is a fixed rate, that is, that does not change, established in the contract and that will be paid diluted in installments. This rate varies between 12 and 15%, according to the administrator, so it is important to talk about all the details of the contract and have more than one budget.
While the interest rate is around 1 or 2% per month, the administration fee does not exceed 0.5%, resulting in significant savings.
What is a consortium’s letter of credit?
A credit card is a document that you receive to buy your vehicle when it is drawn. Unlike what most people think, you do not withdraw the cash value. The consortium administrator passes the amount to the place where you want to buy your car.
It is in this letter of credit that the amount agreed upon in the contract is stated. And from the moment you receive it, you are free to make your purchase, within the established conditions. It works like a voucher.
Some letters of credit allow the recipient to recover the cash value, however, this needs to be very clear before closing the contract. It can be used only in the name of the consortium member.
Is there a consortium for used cars?
You can decide to buy a new or used car with your letter of credit after contemplating. However, the administrator may lay down rules regarding this.
Always read the contract carefully before taking over the consortium. If your intention is to buy a used car, talk to your manager about these conditions.
It is a very common practice for them to set a limit for the year of manufacture of the car or to determine the maximum age that the car must be when you are contemplated and make the purchase. Usually around 10 years.
How can I be contemplated in the car consortium?
There are two ways for you to be considered in the car consortium and finally be able to buy your vehicle, through the draw or the bid. Check out how each one works:
-
- Draw: This is quite simple. Every month the administrator will hold a draw to see who will be the winner and just count on luck. At least one draw is carried out per month according to the contracted plan, which can vary from 50 to 80, normally. Depending on the number of participants, there may be more draws in the same month. You may be lucky to be among the first. If you are drawn, but still do not want to buy your vehicle, you have a maximum period until the end of the consortium to collect your car.
- Bid: It works like an auction, you make your bid, if nobody has a bigger offer, you are the winner of the month, so you don’t have to count on luck. There is also the possibility of built-in bidding, which is when you offer a percentage of your letter of credit. When contemplated, the amount will be discounted.
An important fact to note is that regardless of the number of cars available for bidding, there will always be at least one drawing a month. Therefore, the bid does not exclude the draw from being carried out.
After the draw or contemplation with the bid, you must continue to pay the consortium installments. It doesn’t matter if the contemplation took place at the beginning, middle or end, you must honor it with the number of installments in the contract.
What are the advantages of making a car consortium?
When opting for the car consortium you are automatically choosing some advantages as well as disadvantages.
Starting with the good points, the car consortium has no interest, but a fee for managing the installment. This reduces the final price of the vehicle, as these fees are usually less than the interest charged.
With the meeting of the consortium members, the administrator creates savings with this amount. Therefore, if you intend to save money but face problems with discipline, joining a consortium is an excellent way to make that commitment.
After being contemplated, the purchase of the car will be in cash.
Another great benefit is that, although you are paying in soft installments, after being contemplated, the purchase of the car will be in cash. That way you get even better deals. The consortium member is still able to negotiate great payment terms directly with the managed company, molding the installments and terms according to their needs.
And of course, through the bidding, you can anticipate your contemplation. The higher your bid, the greater your chances. If no one makes a higher bid that month, you guarantee your contemplation beforehand, without depending on the draw.
Speaking of raffles, it is worth remembering that you cannot get credit immediately for the purchase of your car, only when you are contemplated. This can take up to a few years, depending on the plan you have hired.
Taking on a car consortium can be a risk if you don’t trust the manager. If it goes bankrupt you will lose the entire investment. But that shouldn’t be a concern if you deal with trusted managers.
In case of withdrawal, in most cases it is only possible to redeem the money at the end of the consortium.
Is there a consortium for used cars?
You can decide to buy a new or used car with your letter of credit after contemplating. However, the administrator may lay down rules regarding this.
Always read the contract carefully before taking over the consortium. If your intention is to buy a used car, talk to your manager about these conditions.
It is a very common practice for them to set a limit for the year of manufacture of the car or to determine the maximum age that the car must be when you are contemplated and make the purchase. Usually around 10 years.
How can I be contemplated in the car consortium?
There are two ways for you to be considered in the car consortium and finally be able to buy your vehicle, through the draw or the bid. Check out how each one works:
-
- Draw: This is quite simple. Every month the administrator will hold a draw to see who will be the winner and just count on luck. At least one draw is carried out per month according to the contracted plan, which can vary from 50 to 80, normally. Depending on the number of participants, there may be more draws in the same month. You may be lucky to be among the first. If you are drawn, but still do not want to buy your vehicle, you have a maximum period until the end of the consortium to collect your car.
- Bid: It works like an auction, you make your bid, if nobody has a bigger offer, you are the winner of the month, so you don’t have to count on luck. There is also the possibility of built-in bidding, which is when you offer a percentage of your letter of credit. When contemplated, the amount will be discounted.
An important fact to note is that regardless of the number of cars available for bidding, there will always be at least one drawing a month. Therefore, the bid does not exclude the draw from being carried out.
After the draw or contemplation with the bid, you must continue to pay the consortium installments. It doesn’t matter if the contemplation took place at the beginning, middle or end, you must honor it with the number of installments in the contract.
What are the advantages of making a car consortium?
When opting for the car consortium you are automatically choosing some advantages as well as disadvantages.
Starting with the good points, the car consortium has no interest, but a fee for managing the installment. This reduces the final price of the vehicle, as these fees are usually less than the interest charged.
With the meeting of the consortium members, the administrator creates savings with this amount. Therefore, if you intend to save money but face problems with discipline, joining a consortium is an excellent way to make that commitment.
After being contemplated, the purchase of the car will be in cash.
Another great benefit is that, although you are paying in soft installments, after being contemplated, the purchase of the car will be in cash. That way you get even better deals. The consortium member is still able to negotiate great payment terms directly with the managed company, molding the installments and terms according to their needs.
And of course, through the bidding, you can anticipate your contemplation. The higher your bid, the greater your chances. If no one makes a higher bid that month, you guarantee your contemplation beforehand, without depending on the draw.
Speaking of raffles, it is worth remembering that you cannot get credit immediately for the purchase of your car, only when you are contemplated. This can take up to a few years, depending on the plan you have hired.
Taking on a car consortium can be a risk if you don’t trust the manager. If it goes bankrupt you will lose the entire investment. But that shouldn’t be a concern if you deal with trusted managers.
In case of withdrawal, in most cases it is only possible to redeem the money at the end of the consortium.
There is no ready answer to the question of which one is the best. Everything will depend on your need. If you need the car urgently and do not have guaranteed money for a high bid, the best choice is financing.
If you don’t have that urgency, the car consortium ends up being the best option, since it wins in most other criteria.
How to join a car consortium?
Start by making budgets and choosing a trusted manager. It is important that it is authorized by the Central Bank, there are more than 160 and you can check it on the official website. Do not make this investment in an unauthorized administrator, you may risk losing your money.
The amounts can vary a lot, so have at least three budgets on hand to ensure the best value for money.
After that, study the plans well, considering their terms, credit, management fee and installments. See also the number of sweepstakes held in the month. And of course, read the contract and its clauses well.
You can join a group in progress or be part of a group in formation, which is a closed group with a minimum number of members.
Ready. Now you just have to present the documents required by the administrator and formalize your hiring.
What happens if I delay my car consortium installment?
It is necessary to read the contract well to know the consequences established by the contracted administrator, as this can vary. The common practice for a delayed installment is to wait for payment together with the next installment, charging interest and a penalty for the overdue installment.
During this period you will be prohibited from bidding or being drawn, reducing your chances until you can make the payment.
If you are unable to honor with more installments, you may be excluded from the group, in view of this delay hinders everyone’s common goal. And if you’ve already been drawn, you can even have your car impounded.
Did you know that if you are contemplated and your car is stolen you will still need to pay the installments until the end of the contract? Get insurance as soon as you buy your vehicle.
What should I do if I am unable to pay the consortium installments again?
And if you find that you are no longer able to comply with the terms and values of the parcel, you can take some steps before becoming a real snowball. It is worth remembering that this data must also be questioned on the day the contract is signed, so that you avoid surprises in the future.
One solution is that you ask to leave the group , and with that you do not lose all your investment, but many times it will only be reimbursed at the end of the consortium, which can take a few months or years.
You can also ask them to make an adjustment to your letter of credit . If you had contracted a consortium of R $ 60,000 for example, you can consult the possibility of migrating to one of R $ 30,000, reducing the installments.
And who knows, if the contract allows, you can still sell your stake to another person who can continue paying the current installments.
Hiring Criteria: What to consider when choosing a car consortium
If you have decided on the car consortium, we still have some tips for you before you go looking for budgets. Criteria that can be decisive when you close the contract:
- Credit letter
- Deadline
- Administration fee
- Number of drawings
Read each one to make the best decision.
Credit letter
Choose the value of the plan, that is, the total of your letter of credit. When contemplated, it will contain the value you have for the purchase of your car. Together with the maximum term, this defines the value of your installment.
Think about the type of vehicle you want to purchase and hire a plan with a compatible letter of credit, or even higher if you can afford the installments.
Thus, you can use a part of the card to bid. But check all the conditions that the letter of credit establishes.
Deadline
The administrators offer plans with different deadlines. The usual is that they are from 60 to 80 months, but there are some options of up to 100 months.
If you take on a 60-month plan, you know that you will be covered within that period.
The deadline must be thought and planned for two reasons, first because it changes the value of the installments, and second because it determines the maximum term that you will have to be drawn.
If you take on a 60-month plan, you know it will be covered within that period, which is an advantage over the 80-month plan.
Administration fee
The management fee varies according to the administrator. It is usually between 12% and 15%, but this small difference can have a significant result in the total value. Study this rate well and analyze which one brings you the best cost-benefit ratio.
Number of drawings
It is common for administrators to hold a drawing every month, but this is not a rule. Some may offer more draws, usually according to the number of participants in the group. This can be a differentiator when choosing your administrator.
abstract
The car consortium can be an excellent solution compared to financing if you are not in a hurry to buy the vehicle. And even if you don’t want to depend on the draw, it can be a good deal if you are able to bid well.
As the car consortium does not charge interest and has a lower management fee, the vehicle ends up being cheaper by hiring the service.
It is also a safe way to make savings, assuming this financial commitment thinking about the long term you guarantee the investment every month. Just take some precautions, such as choosing an administrator authorized by the Central Bank and following the tips in this Guide.
Glossary
- Consortium: Term used to refer to a group of people who gather to purchase goods or objects of high value, committing themselves to monthly installments. A draw is held to decide the winner of the month in the contracted program.
- Letter of credit: Term used for the document stating the value of the consortium. It works like a voucher, after being contemplated it is with it that you can effectively purchase your vehicle.
- Administration fee : Fee charged by the administrators as remuneration for guaranteeing the car consortium for the consortium member. It does not exceed 0.5%.
- Bid: Term used to refer to a practice that can be performed by the consortium member. A kind of auction that guarantees contemplation for the highest bid, without depending on the draw.
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