Car Loan Interest Rates to Increase after Hike in Repo Rates. To Impact Passenger Cars
Date: June 6, 2018
After hike in repo rate by .25%, Car Loan Interest rates set to increase by 25bps to 50bps
Car Loan Interest Rates to Increase
Car Loan Interest Rates set to Increase after RBI increased repo rate by .25%
Although the final Impact on End Consumer would be 25 bps to 50 bps as Banks will accordingly change rates, and in EMI Terms the resultant EMI will just increase by Rs 25 per Lakh for 5 Years - which for a consumer wont matter actually if the EMI he is paying is increased by say Rs 100 per month on a 4 Lakh loan
But - the sentiment is negative and based on the fact of
1. Fuel Prices at its Peak:
Petrol Prices touching Rs 85 per Litre in Mumbai and Rs 77 per Litre in Delhi
Diesel Prices too touching in Rs 70 per Litre in Delhi and almost touching Rs 75 per Litre in Mumbai
2. Parking Rates also Increased Substantially in Recent Years
Car Parking rates now hover at Rs 1000 to 1500 per month at Metro Station, Office Parking Slot
3. Interest Rates now also Increased
Interest Rates also now Increased and due to it not only Retail Loans will increased, but for dealers who take wholesale Funding for buying Cars from Manufacturer - there Profitability will also get marginally impacted as cost of Borrowing to Increase
4 Diesel Cars to be Impacted Higher
Diesel cars are losing its Shine and Diesel Cars Market Share is just shrinked to 25% as against Petrol and CNG cars at 75%. Higher Road Tax, Shrinking Fuel Gap in between Petrol and Diesel and Ownership cost with Higher EMI certainly to impact Diesel Cars higher
This all going to Impact Passenger Car Sector, and if Interest Rates continue increasing will only impact Sales.