The difficulty with which guarantees are executed in the event of non-compliance is one of the reasons that increases the cost of vehicle loans.
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“If (the creditor) delays in executing the guarantee, the risk increases because during that time the vehicle continues to be used by the person (debtor) even though the credit is not being paid. “That involves a wear and tear of the asset, a depreciation of it.”said Alberto Morisaki, manager of economic studies at the Automotive Association of Peru (AAP).
“Given that the probability of the execution of the guarantee is not efficient, the interest rate rises because the cost of credit is associated with the risk of the operation”he added.
Today, the interest rates on vehicle loans, according to the AAP, are 15% in banks and 18% in credit institutions. Meanwhile, the Superintendency of Banking, Insurance and AFP (SBS) shows that although the average rate has decreased so far this year from 13.6% to 13%, it is still higher than before the pandemic (11.7%).
In the country, The seizure system is cumbersome, resource-intensive and time-consuming, according to the AAP. “It is a bottleneck that must be lifted”Morisaki emphasized.
Endurance
But how long can it take to execute a vehicle warranty? “In some cases it is quick, depending on the financial institution, but in others it can take six months, when it should be immediate. There may (even) be particular cases that last for years where the vehicle owner puts up resistance.”, stated the AAP representative.
One of the solutions that Morisaki proposes to the problem of vehicle guarantees is to create specialized courts in the Judicial Branch.
“Just as there are courts specialized in banking issues, there could be others dedicated to seizure issues. The idea is to make this process easier to give traction to vehicle credit.”he indicated.
In addition to the problem of the execution of guarantees, there are other risks that determine the cost of vehicle credit, such as default.
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In this sense, Morisaki said that the mora of this type of financing is around 5%. However, this figure takes into account only those loans that are in judicial collection or overdue and not those that are restructured or refinanced. If the latter were included, the default could rise to 10%, he estimated.
Garment
Another element that raises the cost of vehicle loans is regulation, according to the AAP. “The provisions requested by the SBS are of the same level as for a credit card where there is no guarantee involved. On the other hand, in the vehicle loan there is a pledge”Alberto Morisaki questioned.
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