Although Brazilians are passionate about vehicles, few people can afford to buy a car outright; most need to find longer financing options to finally put a car in their garage. But what few people know is that today there are 3 different... types of financing that can help you buy a car. 

These types are actually unique modalities with very distinct characteristics.

Because they are unique types, these possibilities become more or less suitable depending on the different buyer profiles and, consequently, their objectives. 

We decided to create today's article with the intention of informing and helping you with your car purchase. 

Our experts will detail the specifics of each of these financing options for you so you can understand which one is best for you. 

If you're looking for your car but still don't know which path to take to get your vehicle, it's simple:

Let's read the article to find out! Shall we begin?

There are not one, nor two, but three types of car financing that can be used when making a purchase. 

Each one has its own particularities and peculiarities, which are quite interesting. 

After much study and research, our experts will now show you the details and how each one works. 

Take a look:

Nicknamed CDC, Direct Consumer Credit is one of the best options among the different types of financing for those who want to buy a car. 

It is one of the most well-known ways to buy a car. 

In this type of transaction, the buyer applies for a loan – or financing – from a bank or financial institution that grants credit for the value of the car. 

In this case, generally, a down payment is offered and the remainder is divided into equal installments, but with an interest rate. 

For the duration of this type of financing, the car serves as collateral to guarantee repayment of the loan. In other words, the vehicle is under lien! 

In other words: You will have possession of the car, but it will not truly be yours until the financing is fully paid off. 

This means you will not be able to make any kind of deal with the vehicle until your debt is fully paid off. 

Furthermore, it's important to mention that, while the contract is active and the loan amount remains unpaid, the car serves as collateral for the institution. 

If you don't pay, the car will go to auction to offset the losses of whoever offered the loan. 

The good news with this type of financing is that you don't need a dealership to be present before you can get your car.

It is important to emphasize the possibility of seeking more favorable interest rates with the institution, making the loan even more attractive. 

The lower the interest rates and the better the installments, the better the deal will be for you!

Our second option among the different types of financing is... leasing!

It's also possible to finance a car through leasing, which is actually a different process from a direct consumer loan (CDC). 

In leasing, the buyer pays a monthly rent for a fixed period to the company responsible for this type of operation, and the vehicle remains in the company's name during the payment of installments. 

Once the full payment has been completed, ownership of the car is then transferred to the buyer's name. 

It's important to mention that this ownership of the car is transferred without any charges or costs beyond what has already been paid over time. 

In this case, just like with CDC (Credit Direct to Consumer), you can negotiate directly with the leasing company, without needing the dealership as an intermediary. 

Interest rates are also fixed and are set at the time the contract is signed. 

In the market, this different type of financing is also known as leasing. 

Similar to the CDC (Consumer Direct Credit), if the buyer fails to make payments, the company can also repossess the car, but in a more efficient manner.

In leasing, since the car is bought by the bank and "rented to be bought" by the person paying the installments, all the legal bureaucracy is not necessary. 

And our third option among the three types of financing is... consortium. 

In a consortium, a group of people interested in acquiring a car pays monthly installments to a company, the consortium administrator. 

Every month, she holds raffles with the goal of awarding a customer a letter of credit. 

Although many people don't realize it, a consortium is indeed one of the types of financing known in the market, similar to a CDC (Credit Direct to Consumer). 

Many say that consortiums don't charge interest, which is true and seems like an attractive option at first glance. 

Although it doesn't charge interest, the administrators charge an administration fee, and adjustments are made from time to time, which ensures that your purchasing power will be maintained, even if you only receive the award at the end of the contract. 

This is a point that needs a lot of attention. 

In the other two types of financing we showed you, the installment amount is fixed, based on a pre-defined interest rate. 

In a consortium, there may be variations throughout the contract, since the readjustment is based on the car's value as registered in the Fipe Table. 

And there's another point: a consortium is only a good option if you're not in a hurry to have the car in your garage. 

Unless you have some money saved up to bid in the raffles – and manage to get the credit letter – there's a possibility you could be selected for either the first or the last installment. 

In practical terms, the duration of the consortium contract is 36 months, and you should consider the possibility of only receiving the car after 3 years. 

Even if you receive the adjusted amount, ensuring it's enough to buy the car with the features you want, the waiting time needs to be taken into consideration.

With various types of financing available on the market, you might be wondering:

How do I choose between these options?

First of all, you need to assess which of them fit within your budget. So, the first step is to find an installment plan that fits your budget. 

Don't forget that in addition to the monthly payments, you will have other costs, such as... car insurance...taxes such as vehicle tax, fuel, maintenance costs, licensing, and many others. 

Furthermore, the rush to obtain the car and be able to use it is another point that should be carefully considered. 

If you want to buy a car for work, for example, you need to sign a contract that already allows you to take the vehicle home. 

In this case, a consortium ends up being a discarded option. 

Our suggestion for you to choose is quite simple:

Put all the points on the scale, weigh the pros and cons of each of the options we've just shown you, and see which one might be the most beneficial for your budget and your needs. 

Simple as that!

Now that you know the three different types of financing for buying your car, it's time to sit down and evaluate everything. 

Only after a detailed analysis will you be able to determine which option is best for you!

Now, if your goal is to own and use a car, but you don't want to worry about vehicle tax, car insurance, and a whole lot of other bureaucratic processes, there's a growing option in Brazil and around the world:

These are subscription-based cars.

Did you know that you can get a car through a subscription directly from the manufacturer at the dealership?

Interested? Want to know more about this option? Then do the following:

Click below to find out how to get a car through a subscription!