Car Loan Incentives

With interest rates being what they are, and have been for the past few months, it is no wonder that car sales and car loans have dropped drastically. In the past three months car buyers have seen interest rates on car loans go from 13% to 16%. No one wants to purchase a car if they are looking at those kinds of rates.

However, Pralay Mondal, head of HDFC Bank’s Retail Assets and Credit Cards, says that things are about to get much better for the car loan industry. Mondal thinks that the industry is going to start offering car loan deals for clients to try and increase business. He says that car loans are going to start looking very attractive for people because they need to start drumming up business.

He says that rack rates are probably going to stay where they are for at least another two years. Plus, he points out that not all car loans are at the higher rates, some will be at the lower ones – depending on your credit history. But more importantly, the auto loan industry and the auto manufacturing industry are in this together because one needs the other.

Mondal thinks that the car manufacturers are going to start reducing the cost of the car loan, offering rates as low as 8.99%. They need the car sales, so more and more of these loans are going to be seen. Mondal says that with the car buying and car loans starting to increase, that the manufacturers will be able to absorb the interest rate burden.

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