Moratorium wary lenders go slow on festive auto loan offers
Although car loan rates are the lowest in the last 12 months, auto dealers and marketers say banks and financiers are being extra cautious in view of the moratorium-related non-performing assets (NPAs) that they are expecting.
Chennai: Despite the festival season being just round the corner, car financiers are not rolling out the big bang schemes that are de rigueur this time of the year. Although car loan rates are the lowest in the last 12 months, auto dealers and marketers say banks and financiers are being extra cautious in view of the moratorium-related non-performing assets (NPAs) that they are expecting.
Kotak Mahindra Prime MD Vyomesh Kapasi said, “The car loan interest rates are down 125 basis points (100bps = 1 percentage point) year on year. The ongoing interest rates are the lowest in a long time with sub-9% for all segments and sub-8% for luxury vehicles. Even used car rates are now down to 12-12.5%.”
M&M dealer Nikunj Sanghi of JS 4Wheel Motor said, “The festival season normally sees major offers by financiers as well, but right now there is very little. And the only sops are on-road funding and 5-year instead of 3-year tenures.” With the moratorium coming to an end, “banks are trying to optimise profits” and being “extra cautious”, he added.
Car marketers say the NPA flood business customers is making financiers chary of being aggressive. But finance support is critical for demand revival. Toyota Kirloskar Motor senior VP (sales & service) Naveen Soni said, “Finance availability and rates are a great enabler to improve market sentiment.”
