Car loans hampered by high rates

Average size of a car loan in Russia exceeded 1.5 million rubles by the end of 2023 and will continue to grow this year

Car loans are becoming more expensive and, coupled with the soaring price of cars, turns them into a luxury, not a means of transportation. Dealers estimate that 70% of cars are bought on credit today, and the average loan amount has already exceeded 1.45 million rubles. High rates may cool the market somewhat this year. Preferential state programmes are going to save the situation. What discounts can be obtained from the state today, which cars they apply to, and what will happen to the car loan market in 2024 — in the review of the analytical service of Realnoe Vremya.

Average car loan receipt has increased by 20.7% over the year

According to the National Bureau of Credit Histories (NBKI), in December 2023, the average amount of car loans issued (for new cars and used cars) amounted to 1.51 million rubles, unchanged from the previous month. However, compared to the same period in 2022, the average car loan receipt increased by 20.7% — in December 2022, it amounted to 1.25 million rubles.

The average car loan grew throughout 2023 — from 1.18 million rubles in January 2023 to 1.51 in November-December. The highest value was recorded in October — 1.57 million rubles.

The largest average car loan was registered in Moscow (1.94 million rubles), Moscow Region (1.78 million rubles), St. Petersburg (1.73 million rubles), as well as in the Leningrad Region (1.65 million rubles) and Krasnodar Krai (1.63 million rubles).

Tatarstan did not even enter the top 10 regions: the republic was the 16th with an average car loan receipt of 1.45 million rubles (+1% growth by November 2023). The Republic of Bashkortostan, according to the NBKI, for example, is the 19th — with an average of 1.41 million rubles. In general, the average check differs slightly by region and everywhere exceeds 1 million rubles. For example, in the Chuvash Republic, which is ranked 30th by NBKI, the average car loan amount was 1.25 million rubles.

“After seven months of growth in the second half of last year, the average car loan amount stabilised at 1.5 million rubles. The stabilisation of this indicator at the end of the year is, most likely, due to the rates subsidised by manufacturers, all kinds of promotions and discounts that stimulate the sale of cars," comments Alexey Volkov, the marketing director of NBKI. “Also, one should not discount a certain saturation of demand for new cars, which was not fully realised in 2022, as well as some growth in the issuance of loans for used cars at the end of the year.”

“The average amount of a car loan taken out when buying a car from KAN AVTO in 2023 is 1.12 million rubles. This figure was obtained by analysing loan data for all car brands offered by KAN AVTO Group," said Rita Khalilova, the sales director of KAN AVTO Group. “Compared to 2022, the average amount of a car loan increased by 27% last year (it was 880,600 rubles).”

The growth of the average car loan amount, according to her, was directly influenced by the increase in car prices. “We can add to this that new models are entering the market, the cost of which is higher than the current model range," explains Khalilova.

According to her forecasts, in the first half of 2024, the average amount of a car loan may grow by about 10-12% and reach 1.26 million rubles.

70% of cars are sold on credit

“The share of credit sales increased in 2023 and reached 70% in December, — said Nadezhda Timurshina, the director of financial services at TransTechService Group. “In the segment of new cars, the average loan amount for 2023 remained at the level of 2022 — in the amount of 1.2 million rubles. But it should be borne in mind that in 2023 the brand portfolio was updated and the share of the premium segment decreased. But in the segment of used cars, the loan amount increased by 20% compared to 2022 and reached 1.1 million rubles. At the same time, the prices of used cars increased by 15% on average.”

“The Central Bank consistently raised the key rate from 7.5% to 16% since July last year. But everyone understands that this is a temporary measure. We expect it to decrease slightly in the first quarter of 2024. This would help revive the market in the spring months," Timurshina believes. “Current car loan rates are high, especially for used cars.”

According to her, the situation with new cars is better: there is subsidisation of credit programmes, according to which customers can get favourable conditions for buying a car.

Discounts for electric car owners and the disabled

Preferential car loan programmes will be in effect until the end of 2026. Since November last year, the Russian government has made regular changes to them (Resolution No. 1834 of November 1, 2023). Moreover, retroactively, they also extended to legal relations that arose on October 1, 2023. In particular, it was decided to increase the discount on the purchase of Russian electric vehicles again — from 25% to 35% (the discount was reduced from January 1, 2023), and it was also decided to expand the number of categories of citizens who can participate in this programme. Now citizens with disabilities can also receive preferential car loans.

Today, citizens who have at least one minor child (Family Car programme); those who has not owned a car (the First Car programme); employees from the fields of health and education; citizens who rent a car older than 6 years old, which they owned for at least 1 year, are eligible for a preferential car loan; as well as those who apply for a loan to buy an electric car. Besides, citizens undergoing military service under contract or conscription (including spouses, children and parents living with them) have benefits.

All of them can count on a discount from the state in the amount of:

  • 35% of the price (but not more than 925 thousand rubles) is for electric vehicles;
  • 25% of the price is for cars sold in the Far Eastern Federal District (Far Eastern Federal District);
  • 20% of the price — for cars sold in the rest of the Russian Federation, with the exception of the Far Eastern Federal District.

Last year, under the preferential car loan programme, it was possible to buy cars from AvtoVAZ, GAZ, UAZ, as well as Haval, assembled in the Tula region, the Evolute and Moskvitch 3e electric cars. At the same time, the price of a car for participation in preferential car loans should not exceed 2 million rubles (except for electric vehicles).

Everything would be more tragic without preferential loans

“We expect a decrease in the dynamics of car loans both in the first quarter of 2024 and at the end of the year. Traditionally, January-February are weak months for the car market, and this year, high interest rates on car loans will be imposed on it," Egor Lopatin, the director of the group of ratings of financial institutions at NKR Agency, forecasts. “If such rates remain in the segment until the end of the year, it will cool down by 20-25% compared to last year.”

In his opinion, the segment will be supported by the extension of the preferential car loan programme for 2024-2026, without it, loans would have fallen significantly more.

Yulia Garaeva

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