Expomóvil makes everyone think about buying a vehicle. Is it the right time? The prices are right. The exchange rate dropped considerably, to the lowest it’s been in seven years. Should one take out a loan in dollars?
Something to consider is that exchange rates never stay the same. They always fluctuate. Over the term of the loan, say eight years, things might backfire as far as the value of a dollar compared to colones.
The generally accepted advice is to borrow in the same currency that you bring in from most of your income, to avoid potential problems.
Financial institutions may offer better interest rates in dollars than in colones but be sure to ask how much the exchange rate would have to change in order for you to end up paying more than you would have with the credit in colones with a higher interest rate.
While you might be able to get a vehicle with only 10% down and small payments over eight years, you will end up paying a ton more that way. If possible, put about 40% down and take out a shorter term loan to pay less in the long run. Also keep in mind that a vehicle loses its value quickly.
Consider the costs associated with a vehicle, like gas, repairs, and insurance. Also keep in mind the percent of your income that will go to paying debts, making sure you will have enough for basic expenses.