Karnataka - Bangalore   

Car loan rate set to go up by 50 basis points

Special Correspondent

Financiers likely to implement new rate in the next few days

BANGALORE: Higher cost of funds are set to push up the car loan rates in Bangalore by 50 basis points, according to car financiers in the city.

Post-increase, a five-year loan for small cars in Segment A such as Maruti 800, Maruti Omni and Hyundai Santro will carry a rate of 9.75 per cent while the rate for Segment B cars such as Ford Ikon and Hyundai Accent will be 9.50 per cent.

Loans for Segment C cars such as Skoda Octavia and Chevrolet Optra will have a rate of 9.25 per cent whereas the premium category Segment D cars such as Mercedez Benz, BMW and Audi will carry a rate of 9 per cent.

Leading car financiers in the city such as ICICI Bank, HDFC Bank and Kotak Mahindra are all set to implement the new rate in the next few days. In fact, officials said that HDFC Bank and Kotak Mahindra have communicated the new rate to the market.

However, ICICI Bank, which has the maximum share in the car loan segment, is yet to decide whether to increase the rate or not, though it has implemented the new rate in Delhi and Mumbai markets.

ICICI sources said that the car market is moving slow in the South India. "Prospective buyers are eagerly waiting for the launch of Maruti's Swift. This could be one of the reasons why the market is moving slow this month," an official noted. Swift is set for a launch in the next few weeks and Maruti expects to sell about 5,000 units of the new model in the first few months of the launch.

The increase in price of Euro III compliant cars has more or less neutralised the marginal drop in prices with the introduction of the Valued Added Tax (VAT).

Interestingly, fierce rate competition in the car loan market coupled with higher delinquency level have driven most of the multinational banks to opt out of the four-wheeler loan business, automobile dealers said.

Printer friendly page  
Send this article to Friends by E-Mail

Karnataka

News: Front Page | National | Tamil Nadu | Andhra Pradesh | Karnataka | Kerala | New Delhi | Other States | International | Opinion | Business | Sport | Miscellaneous | Engagements |
Advts: Classifieds | Employment | Updates: Breaking News |

Stories in this Section

Traffic hold-ups are now common on Airport Road
BDA preparing plan for multi-storey parking lots
Rise in temperature `unusual' for Bangalore
Bangalore University to set up cell for backward classes
Car loan rate set to go up by 50 basis points
`Radio provides easy, cheap source of entertainment'
Driver assaulted, robbed of cash
Children's hospital inaugurated
Teams to crack double murder
Where there is a will, there is a wheel
Around the City
In Bangalore Today

Copyright © 2005, The Hindu. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu