How to acquire fleet vehicles in Latin America

By Daniel Bland - January 18, 2022 (Twitter?@DanielBlandBiz)?GlobalFleet.com-FleetLatAm.com

Vehicle funding and leasing can be done in many ways but how does it work in Latin America? What is the best way to acquire your vehicles and who do you get them from?

First of all, you could acquire your vehicle through a direct purchase from the automaker of your choice, and this could be done with or without financing. Among the best-selling brands in Latin America are Chevrolet, Volkswagen, Fiat, Jeep, Toyota, and Nissan.

Considering that the interest rates in some Latam countries like Argentina are quite high, paying up front could be a viable option if you do not have other investment alternatives that efficiently counter the cost of financing.?

Make sure to seek a discount of 10-20% for upfront direct payments. However, it may be a little more difficult owing to the lacks in supply coupled with robust demand seen in the market today.

For financed vehicles, the benchmark interest rates coming into 2022 in the largest vehicle markets are?Brazil?(9.25%),?Mexico?(5.5%),?Argentina?(40%),?Colombia (3%),?Chile?(4%) and?Peru?(6%). Expect a few more percentage points to be added on to contracts to allow for bank margins.

Besides the region’s largest banks such as Itaú Unibanco and Banco Santander (Brazil), Bancomer (Mexico), and Grupo Aval Acciones y Valores (Colombia), some of the main OEM financers in the region are?Volkswagen Financial Services, GM Financial (mostly Chevrolet), Toyota Financial Services, RCI Financial Services (Renault-Nissan), and Stellantis Financial Services (mostly Fiat).

Keep in mind that you will need to calculate a depreciation of 10-15% after the first year of ownership for direct purchases, depending on the vehicle make and model and other economic impacts. In 2022, depreciation should be less though, owing to supply chain issues and high inflation.?

Another vehicle acquisition option, which has been on the rise in Latin America for some time now, is getting your vehicles through a multi-year rental contract with a vehicle leasing company of which most of them today also provide fleet management services.?

Not only does outsourcing management services free up your time to focus on your core business, there is usually no need to deal with maintenance, insurance, and vehicle tax burdens. In the end, you can achieve significant cost savings if you find the right partner, meaning a leasing company that has multi-regional leverage as well as local expertise.?View more here...