Q COSTA RICA – Here is something that is of no surprise to most in Costa Rica, about half of the 147,000 new vehicles sold in Costa Rica between March 2106 and December 2017, were financed.

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An analysis of the vehicle fleet in Costa Rica by the Business Intelligence Unit at CentralAmericaData.com reveals that placement of loans for vehicle purchases during the period between March 2016 and March this year amounted to US$1.2355 billion.

Analyzed were 344,000 sales and purchase transactions of vehicles registered in the time period.

Of the total, 147,000 transactions were for vehicles registered for the first time. About 50% of these transactions were made by way of some form of financing, supported by loans registered on title.

The remaining transactions relate to sales of vehicles that were already registered. In those transactions, only one-tenth were financed.

The main lenders are the major banks with total loans amounting to US$564 million dollars. Principally the loans were made the state bank, Banco Nacional and the private banks, Scotiabank, BAC San Jose and Davidienda.

Finance companies or ‘financieras’ in Spanish, recorded US$436 million dollars in loans for vehicles.

Leading the group of financieras are Credi Q, followed by CAFSA, CARROFACIL, MB Creditos, Instacredit and Viensa. Credit Q and Viensa are also new and used vehicle dealers.

About half of the loans were for a period of seven years (US$477 million), followed by US$90 million for a six-year term, US$80 million for five years and US$52.5 million for four years.

The leaders in leasing were BAC, Scotiabank, Desyfin and CAFSA.

Besides loans financing, a growing number of transactions were by way of leasing. Some 7,000 transactions for a value of US$230 million dollars were recorded in the time period.

What is not included  is the new trend of “renting“, where the customer rents the vehicle on a long term contract, typically one year or more, without a cash outlay or qualifying for a loan.

In renting, the customer is required to make a security deposit and then make monthly payments.

Renting tends to be more costly than a lease or loan payment. However, in renting there is no requirement for guaranteed residual value (such as is for a lease), or pay costs such as property tax (Marchamo). Repairs and maintenance costs are the responsibility of the rental company. In some contracts, the customer can easily exchange for a different vehicle in the same class or upgrade.