What is an alienated car?
When a buyer finances a vehicle through a bank or a financial institution and chooses the vehicle itself as collateral for debt repayment, it is opting for a fiduciary alienation agreement. It is a financing option that usually makes buying a vehicle cheaper.
As long as the financing of the vehicle is not repaid, that is, the fiduciary alienation agreement is in progress, the owner or owner of the financed vehicle has an alienated car.
The alienated car must have its installments paid on time, otherwise the vehicle can be taken by the bank or financially.
Can I sell an alienated car?
Are you thinking of selling your alienated car to buy a new vehicle? The ideal is that you pay all the installments of the financing, to dealienate the car, and only then put it up for sale.
Now, if you are thinking of selling the alienated car to get rid of debt, be aware: the fiduciary alienation agreement will be active.
There are two alternatives: pay all installments and pay off the financing or find a new buyer willing to take over the debt and who wants to pay everything or take on the next installments. In the latter option, the transfer must be approved by the creditor bank or financial institution.
If you find a new buyer willing to take on the debt, contact the bank or the finance firm to see if the transfer of your vehicle’s financing is released and what the next steps are.
The most anticipated is that the new buyer has to go through a credit analysis, as if he were acquiring a new vehicle.
It’s not that simple, and it may not work. Therefore, in order to sell your car more quickly, the best choice is to even remove the remaining parcels and have the vehicle released for sale, a process called vehicle de-aeration.
Can I buy an alienated car?
Anyone who is thinking of buying a car that has not yet been taken away by the former owner should look into it well before acquiring the debt if that is possible and released by the bank or financial (lender).
How about seeking a negotiation with the seller, paying the remaining installments and paying off the financing? This choice can be advantageous for both, for those who need to sell the car and for those who are thinking of buying a vehicle.
This is because, once the parcels have been removed, the vehicle is no longer restricted for sale and can be sold normally, thus facilitating the transfer of documentation.
Before closing the purchase of the used and financed car, make sure that the installments of the financing up to the present are paid and that there are no pending issues – only then close the deal.
Ask for proof of what has been paid so far and seek to confirm the information with the lender. The contract of sale of the alienated car is indispensable for the safety of the seller and the buyer.
To buy the alienated car faster, prefer to negotiate the settlement of the financing with the seller. A personal loan can facilitate and accelerate the purchase of a used car.
Can I Hire Alienated Car Insurance?
Yes. The car-financed insurance is not the same for a car purchased in cash. Insurance for alienated vehicles includes customer, insurer and financial institution. Indemnity also does not work the same way.
In the case of a car sold, the total compensation of the vehicle is only released after the payment of the financing installments.
The insurer may also be willing to pay the client the remaining installments for the termination of the financing.
The insured can also evaluate the possibility of using the indemnity to pay the debt with the financial and acquire a new vehicle.
How does car finance work?
According to the Central Bank (BC), credit operations are divided between financing and loan operations . The well-financed asset itself can serve as collateral (fiduciary alienation), making the operation safer for the bank or financial (lender) and lower interest for the consumer.
In the application for financing the car, financial institutions perform the credit analysis, evaluate the vehicle to be acquired and possibly if the buyer has other guarantees of debt repayment.
Direct consumer credit (CDC) is financing for the purchase of vehicles, among other durable goods such as real estate. It is awarded by a financial institution in partnership with the store or company that is selling the vehicle, after performing registration and credit analysis of the customer.
Leasing already works as a vehicle rental. The car belongs to the bank or financial until the repayment of the installments. The vehicle becomes the property of the buyer only after payment of all installments.
Understand the difference between credit operations (loan, financing and leasing) in the Central Bank table – BC:
What is the difference between consortium and funding?
When purchasing a car consortium , which has a group of people interested in the same good, the buyer has to pay installments and follow the monthly raffles: if you are drawn you can withdraw the car.
It is also possible to offer a bid for discharge of the missing parcels and be contemplated with the car when the bid is chosen.
Different from what happens in financing , the value of the benefits of a consortium varies during the payments: it can increase or decrease, according to the price of the vehicle in the table during the period.
There is also no interest charge, only an administration fee informed at the time of the contract.