After car prices now car loans go dearer in India
The month of September has come with a couple of bad news for car buyers who were planning to buy their prospective car in the month. Just a few days after some major auto makers in the Indian auto market announced their plans of hiking the price of their cars from September, there comes the news of the leading Auto loan lenders in the country increasing the interest rates on car loans by 50 to 100 basis points (0.5 to 1.0 percent). Due to this hike, the car loan rates have touched the double digit mark after a long time, since last one year it had been floating in the range of 9 to 9.5 percent.
According to industry sources, the increase in the car loan interest rate will be different for different segment of cars. For instance, where the B-segment (compact) cars will now attract a rack rate of 12 percent, the C-segment (sedan) cars will now be attracting a rate of 11.5%. The leading car loan lenders that comprise of banks like Kotak, ICICI and HDFC, claimed to have confirmed the hike in car loan rates.
According to a statement given by Mr. Sumit Bali, CEO of Kotak Car Insurance, to a leading media group, the company has increased the loan rates for new and used cars and the net rate to customer would now range between 10.5% and 11.25% depending on the tenor and model. One the other hand, Mr Arvind Saxena, director, (sales and marketing) at Hyundai Motor, said in a statement that with the festive season round the corner, manufacturers are looking at robust sales. He added that the company hopes that there aren't further interest rate shocks from lenders which could affect sales. According to him the on going sales momentum will remain unaffected by this hike.
As per some industry experts, the interest rates will affect car sales in the Indian market considerably. However, the automakers believe that the effect of the car loan rate hike will be absorbed by the market due to ongoing high demand momentum.
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