Agent’s Fees Being Cut

Car loan industry experts have been saying that something needs to be done about the rates that car loans have been getting processed under. They say that unless something happens, the car loan industry will continue to see major losses in their arena, as people cannot afford to purchase a car with these rates.

However, two banks have stepped forward to try and change that. ICICI and Kotak Mahindra have announced that they are going to start reducing the interest rack rates that they offer on car loans. Both companies have lost money as of late on their commissions from direct selling agents and know that they are doomed to repeat the months that have preceded this change.

They have decided to reduce those car loan rates from 15.5% to 13.5%. ICICI will put their new car loan rates into effect on Friday, with Kotak waiting until Monday. HDFC has said they are evaluating the situation and will be making their decision by Monday as well.

The banks believe that if they can reduce the interest rate on car loans that they will be able to save their customers somewhere around Rs 2,000 a year per car loan. This way the consumer gets a better deal, and the car loan industry gets more loans. It will truly be a win-win situation for both.

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