Why Brazil lacks private party car leasing
Private party automobile leasing only represents about 2% of Brazil's car sales market and this is mainly due to a need for legislative changes, local expert Ricardo Bonzo Filho told Global Fleet in a recent interview.
Moreover, operational leasing in Brazil practically does not exist, according to Bonzo Filho who is the CEO of local online vehicles sales portal iCarros.
"What does exist is financial leasing in which the lessee is responsible for paying his or her IPVA personal vehicle tax and carrying out maintenance. Unlike countries like the US, there is also no option to trade in the car for another when the leasing term is up," the executive said.
In the past, many lessees did not pay their IPVA tax and this created a number of problems. State governments ended up targeting financial institutions as opposed to chasing after every single customer and banks started reporting losses. This is one of the factors why leasing is practically dead in Brazil.