Thread: Buying a new auto

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  1. #52

    For Jax and the Cheese Guy

    This isn't really about buying a car, its for after you have the car.

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  2. #51

    The thread is called, "Buying a New Car In Argentina"

    Quote Originally Posted by Santa  [View Original Post]
    A friend, who has a DNI and speaks like a Portenos, was involved in an accident that probably totaled her car. She needs to buy a car, preferably a new one. The transaction will be in pesos after exchanging dollars at the blue rate.

    I previously, read on this forum, another thread about a forum member contemplating buying a car in Argentina utilizing a car loan. I use the forum search function but was unable to find that thread.

    I would appreciate it if: (1) some one would direct me to the aforementioned thread (2) whether it is cost effective due to inflation to buy a car with a card loan; (3) any stories, helpful information etc. About buying a new car in Buenos Aires.
    http://www.argentinaprivate.com/forum/showthread.php?7505-Buying-a-New-Car-in-Argentina&p=431047#post431047

    Quote Originally Posted by ElQueso  [View Original Post]
    Recently, we've been contacted by many sales persons wanting to sell us a new ("0km") car, both via SMS on our cell phones, as well as via calls made to our home phone (land line). We have been offered payments on a new car as long as 80 months, interest free.

    I've owned a car here for the last five+ years. I paid cash for it, used. It's a 1999 Megane 5-door, really not a bad car. I have ridden it hard and put it up wet many times, so to speak, and really it has served me fairly well. But it's now some 14 years old, about 250K kilometers on the odometer, and I've been spending more and more money on keeping it running. My latest frustration is an engine coolant leak that I've had repaired 3 times now, and like all things Argentine, I'm going to be going back for a fourth visit soon as I find that once again I need to be very cognizant of the need to put water into the radiator before I go anywhere to make sure it doesn't overheat.

    A new car is very tempting for me.

    However, having lived here for the past 6+ years, I knew there wasn't a chance in hell that whatever they had to offer would be advantageous enough to make me want to buy a new car unless I had cash for the full price of the car already in my hand to offer them in exchange. But my wife, being Paraguayan and not as sophisticated as I when it comes to making big-ticket purchases (as anyone else probably is, who comes from a country where credit is relatively cheap [rightorwrong] and people are mostly honest and at least try to pay their bills when it comes to stuff bought on credit) , she was certain we should go check the latest offer that had come in from Ford. Just to make sure. She wasn't sure if I was just being grumpy when I told her it would be a waste of time, or if I really knew what I was talking about. I couldn't give her a specific reason, other than I knew that interest rates on financing would be out-of-this-world expensive, but since they were offering no interest for 6. 67 years (!) I was finding it hard to debunk her optimism with any real facts.

    So we went to go talk to Ford today.

    Of course, in typical Argentine fashion, the salesman with whom my wife had made an appointment was not in today. Nor, it seemed, did anyone in the office even know who he was. So we had to wait some 10 minutes while they found someone who could talk to us, while just about everyone else sat staring at computer screens, or stood talking to their buddies around the water cooler.

    Finally, a young man (easily early 20s) came and introduced himself to us. He asked us what we wanted and I told him we were looking for a car and wanted to see how the promotions that Ford has would work for us. He took us right into an office on the second floor, without even going to the showroom to see what sort of car might interest us.

    The first thing he asks is how much we're willing to spend per month. I told him I didn't want to talk payments until I knew what I wanted to buy and had an idea of what kind of prices we were talking about, how payments worked, how financing worked, etc. He looked a bit taken aback at this, but recovered quickly and led my wife, my sister-in-law and myself downstairs to the showroom.

    I won't go into much more of this particular part. He got me into a couple of cars, hoping to make me fall in love and sign away my life, like any salesman in the world will try to do. He threw out a lot of talk about payments and costs that, quite frankly, I didn't understand at all at that moment, never having looked at buying a new car here before.

    We looked at a Ford Focus, a Ford Fiesta and one other model that now I don't remember the name of. 4-door sedans and 5-door hatchbacks. 1.6 and 2. 0 liter engines. Prices ranged from 106K to 130K pesos.

    So we went to the office again and started to talk seriously. I had to ask him many times about some of these things because the concepts were so foreign to me that I wasn't sure I was understanding. And in some cases, it turned out, I was not! To make a story that's already running long shorter, here's the basics on buying a new car in Argentina:

    You have three options for buying a new car here:

    1) Pay cash.

    2) Finance.

    3) Layaway (sort of).

    I already knew #1 was really the only way to go. It is the cheapest and easiest and most straight-forward way to do it. At the blue rate from dollar to peso, the range goes from roughly $15. 3K to $18. 5K USD. Not really bad for the value. It's relatively a lot of money, and I have bought cars in the States from $12K to $22K (and leased more expensive) , but have never bought with cash a new car. I never had that much money at one time that I wanted to lay out on a car.

    And yet still, this is the best method for Argentina.

    #2 is a nightmare. The only thing that was offered for financing was 30% down payment at a 30% interest rate. I almost laughed at this and of course quickly discarded it. I forgot to even ask what terms the note could have. Even two years would be way too expensive at 30% It is not only very expensive to get, but also very difficult to qualify for a loan anyway.

    Which leaves method #3, a sort of Layaway program, if you don't like the cash option.

    I'm talking US phrases here, but I'm sure many countries have (or have had in the past) stores that use layaway. In the US it's usually stores selling clothes, toys and appliances that offer this (although with such easy credit nowadays for all I know no one offers layaway any more!). You choose what you want to buy, make a down payment, and make payments until you have paid the full amount and can walk away with the merchandise.

    Here, they sell cars in a similar fashion. The payments must be made every month, and the "loan" is indeed interest free. It almost sounds good until you really start looking into it more closely. It took me about half an hour to get things worked out.

    The nice thing about this is that you don't have to wait until you have paid the full amount of the car to actually take possession of it and start using it. You do, however, have to make a certain amount of payments (unless you get lucky. More about that in a moment) before you are able to drive it away. I understand that perfectly, makes good sense.

    BTW. All of this was calculated on a basis of 80 monthly payments. I'm not sure if things get squeezed doing proportionately if, for example, you only want a 24 month period to pay for the car to begin with.

    You have to make 24 payments, all things being equal, before you can take possession your car. There are actually three ways you can take possession before you make the actual 24 payments:

    1) Win a lottery (yes, seriously). In that case, those few who are lucky enough to win the draw receive their car immediately, although of course they have to continue making all the payments. But the good thing is they actually get the use of their car quicker. They make a drawing once a month.

    2) Win a bet (yes, seriously). In this case, you choose an amount to put down as a "bet" (the salesman likened this literally to sitting down at the casino and betting on the roulette wheel, but really fits more closely a silent auction). If the amount you put down is the greatest for your car type, over those who put down money on the same car type, you "win" and can take possession of your car immediately. Of course, as makes sense, you still have to pay off the balance as agreed, on a monthly basis. The salesman suggested that $20K to $30K was appropriate to try to "win the bet." The good thing here is that at least the "bet" goes to your principal, it's not lost.

    3) As far as I could figure, this one was a "special promotion" that they only offered to a certain amount of people each month. Upon paying 7 months of your 24 month "layaway period payment" you could elect to pay the amount of the rest of the 24 months and take possession of your car. This could ONLY happen in the 7th month. You couldn't just decide at the beginning that you were going to pay the full 24 months and take possession then, you couldn't decide at 10 months that you would go ahead and pay the following 14 months. It had to happen in the seventh month.

    Now, I thought all of this was a bit complicated, but OK, not a terrible deal overall. I was actually almost tempted, thinking I could possibly win the lottery (I wasn't going to do the "bet") or wait until my 7th month to pay the rest of the 24 months and take possession of the car right then, and then continue paying at whatever monthly rate I decided I wanted to extend the layaway payments.

    But something wasn't right, I realized. And I was correct. TANSTAAFL (for you Robert Heinlein fans).

    On further questioning, I learned that the price of the car is NOT FIXED until you have MADE THE LAST PAYMENT. Not the last payment in the layaway period of 24 months, but the actual last payment until the car has been paid off. At that point, the salesman pretty much admitted that it was nothing more than a savings plan. That didn't pay interest. In fact, you were free to stop paying at any time and you would receive your money back. Well, heh, not all of it, but 98%

    Every month that you paid, you paid on the projected future cost of the car. As he stated, the Ford Fiesta that was the cheapest of those cars we looked at, had increased in price over the last year "only" (his words) a bit more than $12, 000 pesos! That only meant an increase in monthly payments over the last year of a bit more than $100 pesos a month. Apparently not a problem to the Argentine way of thinking about money!

    Of course at a flat-line increase over, say, six years of payments (BTW. The payments for the cars we were looking at using this layaway plan over 80 months ran between $1200 and $2000 pesos a month) , the price of the Fiesta would increase by as much as $60, 000 pesos by the time you paid it off! And that's if you believe in flat-line increases here.

    I haven't even mentioned licensing taxes (3% of the purchase price of the car due each year, can be paid monthly) and insurance (at least $500 pesos a month, but probably more like 700-800 according to the salesman after pressed).

    Anyway, as I told the salesman, I would rather save my money at something like $3000 pesos a month and pay cash all at once than give my money to Ford (or any other dealer. They all do this) to use for free and have no hedge whatsoever against inflation during that time. In fact, I'd go by a cheaper used car instead of a new one, that the owner isn't so worried about recuperating his production costs against inflation.

    BTW. As we were leaving and going down the stairs to exit the building, the office above where the salesmen were erupted into cheering, clapping and a lot of laughing. We overheard something like ". Foreigners" and "way to go, Hernan" (our salesman's name) in the shouts. Seems like he had us on speaker phone while we were talking. Can't prove it, but.

  3. The Following User Says Thank You to Daddy Rulz For This Post:


  4. #50

    Buying a new car, loan or not and other information

    A friend, who has a DNI and speaks like a Portenos, was involved in an accident that probably totaled her car. She needs to buy a car, preferably a new one. The transaction will be in pesos after exchanging dollars at the blue rate.

    I previously, read on this forum, another thread about a forum member contemplating buying a car in Argentina utilizing a car loan. I use the forum search function but was unable to find that thread.

    I would appreciate it if: (1) some one would direct me to the aforementioned thread (2) whether it is cost effective due to inflation to buy a car with a card loan; (3) any stories, helpful information etc. About buying a new car in Buenos Aires.

  5. #49
    Mongers,

    I very recently purchased a 2009 0km Renault Kangoo 2 Sportway 1.5 Diesel for my business so I figure it is worthwhile to go over the buying process for the benefit of others.

    First, I went to a Renault sales office (Automotores, SA) on Avenida 9 de Julio to order the car I wanted. I knew what the price would be from the internet so there was no haggling involved. Essentially, you tell them the vehicle you want, and they look on their list to see if they have one available. My particular vehicle was sitting at the factory in Cordoba. You have to pay a 1000 AR deposit at the sales office and then go to a bank (in this case Banco Frances) to deposit the rest of the sales price in the account of the dealership. After depositing the money, I went to Automotores central office in Palermo to fill out all kinds of paperwork, all the more complicated because I was buying the vehicle in the name of the company, so I had to prove I was authorized to purchase a vehicle in the name of the company (even though I paid cash for the car)

    After dealing with the paperwork, I walked over to the La Caja insurance desk, which was very straightforward and simple. After everything was finished, I was told I would receive a call by the end of the following week (this was on a Friday) when my car would be licensed, insured, etc and ready for pickup. The vehicle had to be shipped from Cordoba and the registration and license plates had to be ordered which apparently is a process in Argentina.

    Sure enough, the following Friday, I get the call and went to pick up the vehicle in Palermo. The pickup process is simple; they issue the vehicle registration and insurance papers, the mechanics put on the license plates, and you have to pay the first 4 months of registration.

    Keep in mind that the vehicle registration costs 5% of the value of the vehicle per years, for the first 10 years.

    Suerte,

    Rock Harders

  6. #48
    Regular Member


    Posts: 10
    Badboy,

    I have Ituran and never had any problems whith them. The instalation was fast and simple with no problems. I also heard that most people with VW and Peugeot have Ituran and not Low-Jack. I have insurance with LA Caja and its more expensive without it there.

    Saludos,

    Sac

  7. #47
    Senior Member


    Posts: 1657

    Question Lojack VS Ituran VS nothing at all

    I have an important question for all the long term BA residents or even some BA locals. I bought a car about a month ago and I have a dilema, the insurance company has given me the option to install a " recuperador " either Lo-Jack or Ituran, I have heard that Ituran is better and is generally used for higher end vehicles, so I am edging towards that one. But I have also heard some horror stories about the installation guys basically gutting your eletrical system and doing a half assed job putting it back together.

    My question is in two parts, first of all, which one do you think is better Lo-Jack or Ituran? Second do you really think getting either one is required. My insurance costs me the same either way and I have full coverage so if my car is ever stolen and not found, the company will buy me a new 0 Km vehicle. So is it that important to have a system like this in BA?

    Bad

  8. #46
    Senior Member


    Posts: 1657
    A veedub

    Bad

  9. #45
    Congrats Badboy- I am trying to figure out. What brand of car did you buy?

    Regards.

    Smuler

  10. #44
    Senior Member


    Posts: 1657

    Red face My bad, you are correct

    You are right Fac,

    I fucked up, for some reason I was thinking 2% of 30,000 pesos. Well basically the insurance costs .66% a month for full coverage, lo-jack and a $2500 peso deductible on your vehicle damage.

    Bad,

    PS, thanks for pointing out my mathematical genius

  11. #43
    Badboy, just a little clarafication on what you wrote:

    "Mapfre, has a liability only insurance or a flat 2500 AR deductible for the monthly cost of 2% the value of the vehicle. Good stuff."

    If I understood, then the monthly cost for insurance on a US$30,000 car is US$600. I'm sure I'm not reading your statement correctly.

    When I step out of my apartment in Las Cañitas and see a muchacho driving around in a brand new Vento I'll have to assume it's you. Suerte.

  12. #42
    Senior Member


    Posts: 1657

    Checkmark Badboy's first car buying experience in BA

    Ok,

    I finally bought a car, took forever to find a dealer that actually had one on hand, most dealers give you the run around that might last months, so I went with a large dealer that had a few available. I didn't get my first choice in color, if I were to have waited I would have gotten it by July. Basically there is very little to no haggling for popular brand new cars. It just doesn't exist, they pretty much just give you the take it or leave it line. I was still able to shave off a little off the top. You can buy a car without a DNI, but you will need your passport, a CDI, and a constancia de domicilio and or a utility bill in your name, this is mostly for yearly tax collection. Once you reserve the car, make sure they give you the chassis and motor number, aka the VIN number. And have them write that on the Reserve, meaning they have the car and you should get it within 48-72 hours.

    Now the process is pretty simple, you contact a dealer, you see the show room models, you make an appointment to go to their depot and see the actual model you will purchase, you leave a 200 dollar reserva, then you make arangements to make payment through their local bank, they give you the account number and you make payment to the account for the total price. You can also pay in cash at the dealer, if they allow that. Once that is done, you go to the dealer with the reciept from the bank and you speak with the administration, you sign some paperwork, they get the ball rolling on the entrega and the administrator will try to squeeze a few extra bucks out of you. This one tried to tell me the price had gone up 500 pesos, I told her to take a hike, and either respect the sale price or give me my money back, but there was no chance in hell I would pay one cent more. They then hand you over to the accessory department, where they try to sell you ll kinds of extras, like tinted windows, laminated windows, navigation, chrome accents and so on. I must admit, I accepted some extras. Then they wheel you over to the Insurance guy. Since I already knew the insurance guy I didn't have to deal with him. That was about it, you will recieve the car within 48-72 hours later, with all the accessories added, fully taxed, titled and insured. Also remember you will pay the accessories at the moment you pick up the vehicle, you will also pay any extra licensing you haven't already paid. The insurance company will call you a week later to schedule the Lo-Jack installation. Thats about it.

    Ok now onto a couple specifics, The insurance company most dealers work with is LA Caja www.lacaja.com.ar I think, They DO NOT insure expats with NO DNI, they will not do it because they can't do it, since they don't have the system set up for it. They offered to insure that car under a relatives name or maybe an Argentine friends name, the catch with this is, if your car is stolen or wrecked, the insurance will pay out to your friend or relative, meaning your argentine " friend" will be given either the total value of the vehicle or a brand new vehicle IN HIS NAME, then he will have to transfer it to you. This can be risky, so avoid that. Mapfre,www.mapfre.com.ar, a much bigger and better insurance company specializes in insuring " extranjeros ", or foreigners. Though their insurance method is different, La Caja has either Liability insurance that is about .33% of the total price monthly payment, and then they have full coverage in 10% , 5% ,2% and 1% deductible forms which are increasinly more expensive in monthly payments but the deductible decreases. Mapfre, has a liability only insurance or a flat 2500 AR deductible for the monthly cost of .66% the value of the vehicle. Good stuff.

    In all I found the whole buying process pretty easy, and with Mapfre, the insurance process was just as easy. The fact that many dealers didn't have the car in stock was very frustrating but I find that the case with just about everything I purchase in BA.

    Bad

  13. 05-15-07 12:30


  14. #41
    Senior Member


    Posts: 1657

    Wink Cut out the middle men, pay in cash, and you are looking at a minimum of 25% off

    Flat screen TV's,

    I would say your best bet is to get in good with a mayorista, you know, the person who sells the tv's to the Fravegas and so on. I know some people that can get me up to a 25-30% discount on the tv. You are basically cutting out the middlemen. I have learned that the best way to get things cheaper is to eliminate the number of hands getting paid on your transaction. If you buy at Fravega, you are feeding not only the corporation, but the manager and the salesperson. If you buy directly from the mayorista, you cut out all those hands,. PS, this works for cars as well

    Bad

    BTW, I will stay away from discussing tax evasion online and so should you.

  15. #40
    So is everyone in agreement that with a cash sale the retail business hides the paperwork from the tax collector and passes up to 21% discount to the buyer?

    I can see this working for a few smaller items sold in volume but how the hell do you hide an automobile? Presume it was imported, has documents, ID numbers, needs to get transferred to you etc. How do you transfer a newly imported car AND the dealer doesnt have any records of it? I think we need Dickheads or Jacksons help with this one.

  16. #39
    Dick,

    10% discount is not bad, however I get a 15.5% discount on LCDs, (plus I get to flirt with the Samsung representatives who look like models but don't know anything about LCDs) computers, and printers. However, small items like telephones I only get a 10% discount. If anyone is buying items like LCDs just go to Fravega on Cabildo y Mendoza and keep sending the salesman back to talk to his manager to increase the discount. The salesman will work hard for you, he is motivated to make sales because his pay is a combination of a low monthly salary and commissions. If you don't speak castellano, just ask for a salesman who speaks english (usually there is one who speaks a few words of english) Suerte.

  17. #38

    Cash is king

    Mongers,

    About a month ago I bought two 32" LG LCD tv's for the business that I am involved with. The Musimundo price was $5000 AR for each tv, but in further illustration of "cash is king" I walked out of the place with both tv's for $9000 AR paid in cash. In reality, with the 21% IVA credit that businesses here can get when making purchases, the tv's went for only $7110 AR for the both. Something to keep in mind when making big purchases here, as I negotiated the cash deal BEFORE informing Musimundo it was a business purchase that would need an official factura (my guess is they would have given me a bullshit factura and kept the 21% for themselves)

    Suerte,

    Dirk Diggler

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