Roberto Selbach

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Tag: economy

Why can’t people buy newer cars in Argentina?

This is part of a series of posts about Argentina and the City of Cordoba. These are little facts I wish I knew about before I came here as an expat.

One of the first things I noticed when I arrived in Cordoba, Argentina, was the amount of old cars going around. And I’m not talking about 10-year-old cars, I’m talking about 30 years or so!

You can really find some rarities such as the Citroën 3cv happily racing around town all the time. As a consequence of all that, you can also find a disproportionate amount of cars stalled on the streets, people trying to do something under the hood. It’s really amazing how many broken down cars you’ll see every day.

Citroën 3cv

I used to wonder why that was. Now I understand.

There is no credit in Argentina. Well, technically there is, but it’s so expensive that it’s as if it doesn’t exist. That’s why people normally need to buy stuff with cash upfront. Cars, of course, happen to be expensive and most people can’t save enough to buy newer cars like that. The same is true for several other goods, but cars happen to be the most visible symptom.

From time to time, coincidently around election time, the federal government creates some credit program. These programs are temporary and limited in the number of people who can apply.

And then there’s a second problem—informality. In order to avoid taxes and benefits, most companies hire people either with no documentation or with phoney pay information, e.g. if someone’s salary is, say, $1,000, the companies would register the employee as being paid $250 instead, thus being able to pay less taxes.

And thus even with those government credit programs, most people can’t even qualify as they can’t show enough income.