Increasing costs of steel and other such inputs have already led to an increase in car prices. Add to that the sky-rocketing fuel prices and owning a car becomes bloody expensive.
What about those who already own a car, especially the ones who have bought them on loans? Rising interest rates have had a greater impact on these borrowers in terms of the increase in EMIs. The slack in the job markets, stop on salary increases…mounting pressures of inflation on expenditure… All these mean that a lot of borrowers are moving from being car owners to car loan defaulters.
Wait, this isn’t over.
Banks seem to be taking to tougher recovery measures. On the other hand, the Supreme Court extended the deadline on repossessing and selling defaulters’ cars to three months from the erstwhile 24 hours deadline.
These developments have had a two-pronged impact on the sector: lenders have made lending norms stricter and old car prices have dropped.
Finally the good news - old car prices have dropped by 15 to 25 per cent. About a quarter of the cars in this market are repossessed cars. Borrowers who can get a loan can get good cars at cut rates. They could also vie for a luxury car as these prices will see steeper falls.
November 18th, 2008 at 12:51 pm
I totally agree with the authors point of view, but this would not be a long term scenario it has to change. Government would very soon take some steps to ease the pressure.The good news is that the steel prices have started to come down. My advise would be when you have money you buy car or whatever you need sees if you just wait for scenario to settle down you might the spent the you have now.
November 18th, 2008 at 12:58 pm
Thanks to add to my knowledge that the price of old cars has been dropped. I was just looking to buy a second hand car to buy and i think this is the right time to go for it. Can you just give an idea till when the pressure of increasing cost would come down.
November 18th, 2008 at 8:22 pm
“Finally the good news - old car prices have dropped by 15 to 25 per cent. About a quarter of the cars in this market are repossessed cars.”
What is the source to the same since when i went to just buy second hand car nothing has changed. Please let know from where to buy car at 15% drop rates.