MercadoLibre, Creditas Drive Used Car Loan Tie-Up In Mexico

Argentine online marketplace MercadoLibre and Brazilian financial service provider Creditas are launching a partnership to allow MercadoLibre users to request used car loans in Mexico, the companies said on Thursday. MercadoLibre, the ubiquitous Amazon rival in Latin America, partnered with Creditas in an effort to attract customers in a country with low credit penetration, MercadoLibre's head of autos in Mexico, Jaime Ugalde, told Reuters. Used car lots are being recruited to join the platform, and the two companies hope to expand semi-new offerings throughout Mexico starting with the capital of Mexico City, said Creditas country manager Gabriela Rolon.

"It's great for sellers too," said Rolon, citing ease of transactions, adding that would-be buyers will be able to shop car lots knowing a specific amount for their down payment had been approved.

In Mexico, demand for used cars has steadily risen along with supply-chain disruptions exacerbated by the COVID-19 pandemic and Russia's invasion of Ukraine, according to industry experts.

In Mexico, demand for used cars has steadily risen along with supply-chain disruptions exacerbated by the COVID-19 pandemic and Russia's invasion of Ukraine, according to industry experts.

In the first half of this year, MercadoLibre searches for cars with less than 25,000 miles (40,234 km) and less than five years old doubled, according to company data.

"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.

MercadoLibre's retail platform has largely served as online classified ads until now for autos, Ugalde said, with users selling cars to other users without transactions going through the website.

Ugalde added that MercadoLibre aims to verify all its users by the end of the year to avoid scams that have caused the Mexican government to issue warnings.