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