When Luiz Carlos Ferreira decided he wanted to get walk-in closets built in the flat he had just bought in the suburbs of São Paulo, he faced a quandary. He did not have the money to pay the 10,000 reals ($5,700, £2,900, €3,900) bill outright and baulked at the financing packages offered by the builders and his bank, which both came in at over 6 per cent per month or more than 75 per cent per year.

So the legal worker sold his three-year-old Fiat Palio for 22,000 reals and used the proceeds both to buy the closets and pay off the balance remaining on his car. Then he walked into a Volkswagen dealer and bought a brand new Fox on credit at 15 per cent APR over 60 months.