71% of Colombians who declare bankruptcy have, among their debts, a vehicle loan, that is, approximately 7 out of 10, as reported by an analysis by the firm Insolvency Colombia and IFI Financial Intelligence, which analyzed statistical data from more than 700 clients Advised on insolvency law procedures, this in order to evaluate the impact of vehicle loans on people’s finances.
(Tips for not overflowing your debt capacity).
According to the company – which is part of the 51 most promising startups of 2022 in the country according to iNNpulsa and Starter Company -, there is a 36% more probability that a person with a vehicle (car or motorcycle) will declare bankruptcy, compared to a that do not have any type of vehicle.
As explained by Luis Benítez, Director of the firm Insolvency Colombia and IFI Financial Intelligence, “The purchase of a vehicle is more associated with a type of status that people give themselves throughout their financial growth, therefore, on some occasions, and with the existing vehicle credit facilities in the country, many borrow more than of what they can pay with vehicles that, in some way, represent that status to them”.
The firm’s analysis also showed that people who earn between 2 and 4 million pesos and have a vehicle are up to 200% more likely to declare insolvency than those who earn salaries above 4 million.
(When a debt prescribes and how recommendable it is for this to happen).
In terms of gender, the report indicates that women are the ones who best manage expenses when having a vehiclethis is evidenced by the fact that only 35% of insolvency applications are from women with a vehicle, while 65% are from men with a vehicle.
HOW TO BUY A VEHICLE WITHOUT INVOLVING A FINANCIAL RISK?
The firm Insolvency Colombia and IFI Financial Intelligence also shared a series of recommendations to take into account if you are thinking of buying a vehicle through a loan.
• Keep in mind that a vehicle will never be an investment and on the contrary it will represent an additional expense. If your strategy is to reduce expenses, buying a vehicle is not a good option.
• The monthly expenses of a vehicle – outside the credit installment – can range between $500,000 and $1,500,000 depending on the type of vehicle.
• Currently the vehicles are given without a pledge, but with a collateral, which means that, at the time of non-compliance with the credit installments, the financial entity can come to take the vehicle with a simple notification to the competent authorities, with this you will lose everything paid.
(For a 2022 without debts: financial resolutions for the new year).
• If you are going to buy a vehicle through a loan, check the interest rates and the term beforehand, simulate the installments and make accounts depending on your income. If the credit installment represents 20% or more of your income, it is not advisable to access the credit and it is better to wait for your income to improve.
• Before buying a vehicle, always check if the vehicle has a previous guarantee record.
• In addition to vehicle loans, there are other options such as financial leasing, according to your financial situation, you might evaluate your best option.
BRIEFCASE
