MercadoLibre, Creditas Team to Offer Used Car Loans in Mexico

South American eCommerce giant MercadoLibre and Brazilian financial service firm Creditas have joined forces to allow MercadoLibre users to apply for used car loans in Mexico.

MercadoLibre’s head of autos in Mexico, Jaime Ugalde, told Reuters Thursday (July 28) that the two companies are hoping to attract consumers in a country with minimal credit penetration.

The companies are recruiting used car lots to join the program, with the hope of expanding semi-new offerings throughout Mexico beginning with Creditas, country manager Gabriela Rolon told Reuters.

Read more: Creditas Raises $200M, Buys Brazilian Bank

“It’s great for sellers too,” she said, adding that would-be buyers can begin searching car lots with the peace of mind that a specific amount for their down payment had been approved.

The Reuters report noted that demand for used cars in Mexico has grown alongside supply chain issues stemming from the pandemic and the Russia/Ukraine conflict.

In the first six months of 2022, said MercadoLibre, searches on the company’s marketplace for vehicles with under 25,000 miles and less than five years old doubled.

“I think it can be a great option for someone who, for example, is looking for their first car and doesn’t have any credit history, or for someone who’s looking for an older car because that’s what they can afford,” said Ugalde.

See also: Western Union, MercadoLibre Partner on Remittances to Mexico

Earlier this month, MercadoLibre teamed up with Western Union to allow digital remittances to be sent in Mexico.

This allows families living abroad to send money using Western Union, while people in Mexico can collect payments through Mercado Pago, MercadoLibre’s digital finance operation.

Also this month, Creditas announced it was raising $200 million and buying a bank and a mortgage startup in a move to bolster profitability.

Creditas CEO Sergio Furio said his company, which runs an online consumer loan platform, is purchasing Andbank’s Brazilian banking license and plans to start accepting deposits.

“Getting retail deposits as a new alternative for funding will improve our margins,” Furio said.