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 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 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
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.