1 fév 22

How to finance your vehicle fleet in Latin America

Financing your fleet vehicles in Latin America is a bit more costly when compared other regions (e.g. North America) and this is partially due to the high interest rates you will find in the region.

To learn more about the many ways you can acquire and manage your fleet vehicles worldwide, pre-register for the Global Fleet Conference 2022 taking place 2-4 May in Lisbon (Cascais).

The benchmark interest rates coming into 2022 in the largest Latam 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 top of these to allow for bank margins.

Among the best-selling brands in Latin America are Chevrolet (mainly South America), Volkswagen, Fiat, Jeep, Toyota, and Nissan (mainly Mexico). As for models, the top sellers are Toyota Hilux, Chevrolet Onix, Fiat Strada, Nissan Versa, and Volkswagen Gol. 

2022 Nissan Versa, best-selling sedan in Latin America (copyright: Nissan)

Besides the region’s largest banks financing vehicle acquisitions 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). 


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-country leverage as well as local expertise. 

As for best practices in the region, closed-end agreements which are more common in Europe are generally popular in South America while open-end leases influenced by models seen in the United States are more common in Mexico. 

While closed-end leases could give procurement experts more peace of mind as they do not need to deal with vehicle depreciation risk, open-end leases do have more flexible terms, a more attractive alternative to some. 

Also keep in mind that benefit cars for executives are generally more popular in Latin America, much like Europe, in comparison to North America which favors tool for trade vehicles. 

In terms of flexibility, Latin America is an open-minded region and being adaptable is key right now, especially in the wake of the changing business scenario. Besides more people working from home, there is a lack of supplies in the market nowadays such as raw materials and semiconductors and in turn, vehicle models.

Vehicle availability is of utmost importance and some customers are willing to change the brand or model of their cars to get this or even acquire used cars to fulfill short term needs.

Nowadays, many companies are seeking to free up cash for their operations. Besides seeking adjustments in kilometer (mileage) limits and contract duration (extending or early termination), some are looking at the possibility of having a substitute car or complementary mobility services or even a pay-per-use model. 


Considering flexibility, shorter-term agreements come to mind, meaning subscription (month-to-month) services. For one, it could be more cost beneficial and less work intensive for fleet managers as 24/7 road service as well as vehicle maintenance and depreciation are burdened to the lessor and not calculated in TCO (total cost of ownership) on fleet manager books. 

In addition to the monthly fee, pay attention to kilometer limits and contract periods when seeking these types of agreements (e.g. US$400 per month with 4,000km limit and a fidelity of 12 months). An EV model would be priced 2-3 times more.  

Besides subscription services being more commonly offered by OEMs nowadays, these types of offers are available from vehicle leasing and rent-a-car agencies in Latin America and some to note are ALD Automotive, Arval, LeasePlan, Element Fleet Management, Localiza, Fleets International Enterprises, RDA Mobility, AutoCorpTIP Mexico, Unidas, Movida, and Porto Segura.

Finally, make note that subscription leasing is a way for fleet managers to try out new powertrains such as electric vehicles (EV) and hybrids and there are flexible options which involve renting for shorter periods (week, day, and even per minute). There are several companies of such popping up around Latin America. Among them are Chile-based Awto as well as KW Fleet and Itau VEC from Brazil. 

Authored by: Daniel Bland