The consortium sector is set to grow in 2019. The new members increased by almost 15% from January to August, compared to the same period last year, according to data from the Brazilian Consortium Administrators Association (Abac). After all, is it a good option?
Technically, the consortium cannot be classified as an investment. According to the Central Bank, it is a gathering of people or companies in a group, promoted by a consortium administrator, with the aim of acquiring goods and services through self-financing.
For those worth it
"The consortium is an investment that acts as a forced savings," said Embracon's business vice president Luis Tuscano. "It's a way of bringing together capital for a specific purpose."
For Fiduci's financial planning director, Walter Police Univer, the consortium works well for a specific consumer profile.
"For a consortium to be worthwhile, a person needs three characteristics: no money to buy the good in sight, no urgent possession of the good, and one must admit that there is no discipline to invest each month in the application." police say.
How the consortium works
The most common consortia are buying cars, motorcycles and real estate. There are others, for electronics and even services such as travel. The groups last from 12 to 180 months.
The cost of each consortium quota is basically the value of the asset itself plus an 18% administrative fee. These amounts are charged diluted in monthly installments.
Cheaper than financing
Take, for example, a $ 50,000 car.
Consortium: If you purchased this car from a 60-month consortium, the administration fee would be $ 9,000 (18% of $ 50,000). Thus, the monthly installments would be $ 983.33, with $ 833.33 for the car segment and $ 150 corresponding to administration fees.
Financing: If the same car had been bank-financed, with one of the lowest rates being practiced today, at 1% per month, the monthly subscription would reach about $ 1,112.22.
"The consortium can be presented as a cheaper alternative than financing," says Embracon's vice president.
It may take time to get well
The problem, the financial advisers point out, is the issue of property ownership, which in the consortium is uncertain. The consumer may be lucky and get their hands on the product within one month of signing the contract, but may have to wait for all the benefits to be paid.
Delivering the consumer good depends on happiness or a real auction. In the consortium, each month there is a draw involving one of the group members. You can also purchase the product by auction, as if it were auctioned – whichever gives the highest value to the item. The amount paid on the bid is reduced by the final price.
Be careful to take
1. Credit approval
The consortium also has credit approval. If the credit profile bidder declined after deliberation, he may be required to wait until the end of the group to get his hand on the asset. That is: you will only own the property after you have paid all the benefits.
"Therefore, my recommendation is that this credit assessment be made early in the group, before joining the consortium," the consultant said.
2. Check with the consortium administrator
Carefully check the sound of the consortium administrator. Before joining the group, it is necessary to check with the Central Bank that the consortium administrator is regular, has no backlog and is therefore a safe and legal company.
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