The results of January surprised participants in the national car loan market: Russian banks issued more than 130.6 billion rubles to citizens for the purchase of cars, which became a historical record for the first month of the year. “MK” decided to find out what is causing the unusual boom in car dealerships and where car loan rates will go in the first half of the year.
“In January 2024, the volume of car loans issued increased significantly – by 35% year-on-year. In quantitative terms, more than half of car loans came from the used car market, but in monetary terms the market for new cars leads,” Nikita Kulagin, head of the macroeconomic analysis department at Sovcombank, told MK.
The unusual activity of borrowers in the car lending market at the beginning of the year somewhat puzzled analysts. After all, according to tradition, January is a “quiet” period. “Some of the borrowers who planned to buy a car completed transactions in the past year. Others prefer to start looking for the right car closer to February, when the long weekend is over and the usual work schedule has been established. January 2024 became extraordinary for the segment,” said VTB Vice President Vladimir Vysotsky.
According to his estimates, during the second month of winter, Russian banks issued more than 130.6 billion rubles to individuals for the purchase of cars. This result was 75% higher than the results for the same period in 2023 and became a record for the first month of the year. “The high activity of borrowers was stimulated by seasonal promotions and discounts, which this year turned out to be more attractive than usual,” Vysotsky explained.
The “banquet”, which was held after the Christmas holidays by buyers of cars on credit, became, in fact, a continuation of the big New Year’s “party”. According to Autostat, last December Russians spent a record 385 billion rubles on the purchase of new cars. Two-thirds of all the money came from Chinese stamps. In general, Russians spent about 8 times more money on mass models than on premium ones.
The average amount of a car loan in 2023 increased significantly, by 40%, and amounted to 1.64 million rubles, incl. RUB 1.95 million (+34%) for a new car and 1.48 million rubles. (+45%) - for a used car. At the same time, the average car loan amount for a domestic car in 2023, according to Otkrytie Auto statistics, was 935 thousand rubles, for Chinese - 2.2 million rubles, for Korean - 2.6 million rubles, for Japanese - 3 .4 million rubles, for European brands - 3.8 million rubles. The average car loan term increased over the past year from 70 to 74 months. Most often, car loans were taken out by residents of Moscow, St. Petersburg, Krasnodar Territory, Tatarstan and the Chelyabinsk Region. In most regions, for every car loan issued for the purchase of a new car, there were on average two car loans for the purchase of a used car.
Analysts have recorded another trend - the growing popularity of digital sales channels. “More and more car loans have recently been issued by banks online. This technologically advanced and convenient method of lending seems attractive primarily to younger borrowers. They are also active participants in government programs for preferential car loans, the conditions of which are significantly more attractive than market ones,” explained NBKI Marketing Director Alexey Volkov.
It is no secret that in the current conditions, the renewal of the vehicle fleet of individuals is hampered by the high cost of cars. Many new cars are very expensive. Not all Russians can afford to buy with their own money. And here the support of the state came in handy. Let us recall that at the end of last year the government decided to extend and expand the three-year program of preferential car loans (up to 65 billion rubles), which, according to the Ministry of Industry and Trade, will allow the sale of more than 330 thousand new domestic cars, and preferential leasing (up to 31 billion rubles) .
“In 2024, the planned volume of financing of preferential car loans (17.3 billion rubles - MK) will support customer demand for at least the first half of the year,” Alexey Bessonov, head of the product policy department of Rosbank Auto, told MK. In his opinion, the main limiting factor affecting the sales of car loans is the high key rate of the Bank of Russia.
“The tightening of the Central Bank’s monetary policy led to an increase in weighted average rates on car loans from 14% in the first half of 2023 to more than 18% in January 2024,” said Nikita Kulagin, head of the macroeconomic analysis department of Sovcombank. However, in his words, it is important to separate the primary and secondary segments of the car market. Most automakers have subsidies for dealers on new car loans. As the “key” increases, the size of the subsidy may also increase, so the impact of the Central Bank’s rigid exchange rate on the cost of the loan is slightly softened. In this case, automakers sacrifice part of their margins. “With car loans for used cars, everything is simpler. Here, interest rates move along with the key rate,” says Kulagin. According to him, some Russian car dealers have begun to offer subsidized rates on such loans, but their scale is still extremely small (less than 1% of all issues).
“The increase in car loan rates has led to a slowdown in car loan issuance and car sales in general. As a result, unsold cars accumulate in the warehouses of distributors and dealers,” said Dmitry Maslov, Managing Director of Expobank. In the near future, in his opinion, this may lead to lower car prices. “The situation on the car lending market will largely depend on the decision of the Central Bank in mid-February. Rates will follow the change in the key,” the expert is sure. According to his forecast, the regulator will begin to reduce the “key” only in the second half of 2024.
Alexey Bessonov does not expect sharp easing by the Central Bank or changes in rates in the next two to three months. At the same time, there are already attractive conditions on the car lending market from car manufacturers who subsidize their loan programs, the cost of which may be lower than the key rate of the Central Bank.
“In the first quarter of 2024, rates are highly likely to remain the same, which will somewhat restrain the growth rate of new issues,” believes Ksenia Yakushkina, director of bank ratings at the Expert RA agency. In her opinion, in addition to the expected reduction in the key rate, market dynamics will also be influenced by the continuing increase in the supply of passenger cars, as well as the increase in public confidence in previously unknown brands.
Car buyers forgot about the “quiet” season