Auto loan rates to riseAuto loan rates to rise by 50-100 bps
Apnaloan.com Research Bureau
01 Jul 2008
Buying a new car will get costlier from this week. According to car dealers, ICICI Bank, HDFC Bank and Kotak Mahindra have all lined to hike rates by 50-100 basis points (bps).
As reported by Economic Times, according to Kotak Mahindra Prime CEO Sumit Bali, the Company has decided to effect a 75-100 bps hike from July 1. Whereas HDFC Bank is planning a 50 bps hike.
Interest rates on small cars are 13.5-14.5% while for mid-sized models it is
12.75-13.5%. A 100 bps hike pushes up the EMI of a 3 year, Rs. 4 lakh loan
by Rs. 50 per lakh or Rs 200 per month. That works out to around Rs. 2,500 a
year. But given that this is the third hike, the combined pinch will be around
Rs. 600 per month, or Rs. 7,000 a year. Over four years, it adds up to Rs.
28,000-30,000 even for a mass mid-segment car.
Car financiers have undertaken at least one hike (in some cases two) this year. In April, all financiers went in for a 75-100 bps increase. Some followed it up with another hike in May-June.