Cars grow in debt – Kommersant

In April, a historical record was set on the car loan market – the volume of the loan portfolio reached 1.25 trillion rubles. At the same time, the current levels of car sales in Russia are more than twice as low as the record months of previous years, experts point out.

According to the Scoring Bureau, published on Saturday, in April, the total portfolio of loans for the purchase of cars from Russian banks grew by 7.1% and reached a maximum of 1.25 trillion rubles in history. According to the company, over the year the number of car loans issued increased by 3.7 times, to 68.9 thousand, and their amount – by 4 times, to 90.4 billion rubles.

VTB notes that the growth of car loans in the first four months of the year was also a record. The volume of loans in January-April at the bank doubled compared to the same period in 2022 and amounted to 34 billion rubles, the number of loans for cars increased by 2.5 times, to 28 thousand.

“The main drivers were the demand for used cars, an increase in the supply of Chinese brands, an expansion of the range of Russian cars and an increase in cash car loans,” VTB said.

Participants of the banking market hope for strengthening of the trend. “The results of May will exceed the April figures,” says Sergey Litvinenko, head of Alfa-Bank’s car loan development department. “We expect that the car loan market this year may come close to 1 trillion rubles.” According to him, the market continues to trend towards an increase in the contract terms of car loans, which is dictated primarily by the desire of customers to reduce the monthly payment. “This has become especially relevant against the backdrop of a significant increase in car prices,” says the banker.

The results of the dealers’ business in April also seem to be very successful, but against the backdrop of the deepest failure in the spring of last year, Otkritie Avto notes. “The share of loan sales in auto retail will continue to recover, including against the background of rate stabilization, and the total volume of car loans issued by the end of 2023 may return almost to the levels of 2021, showing growth, subject to a relatively stable geopolitical background and macroeconomic situation, by 35–40% and having reached about 950 billion – 1 trillion rubles,” they say in Otkritie Avto. VTB is confident that sales of car loans in Russia in 2023 will exceed the record level of 2021, and the issuance will reach 1.13 trillion rubles.

As for rates, according to Stanislav Sukhov, an analyst at Frank RG, they were “smoothly declining.” “Historically, car loan rates are more inert than, for example, mortgage rates, the key rate of the Central Bank has long been kept at the same level, and car loans continue to win back the previous decline, although this trend may soon end if the regulator moves to a rate increase cycle,”— says the expert. According to the latest Central Bank data, in March 2023, the weighted average rates on loans for cars up to one year were 16.20%, over one year – 14.33%, while at the beginning of 2023 they were 17.04% and 14.48 % respectively. According to the results of the first quarter of 2023, the average market value of the total cost of a loan for cars with a mileage of up to 1,000 km was 12.5%, for cars with a mileage of more than 1,000 km – 17.5%, according to the data of the Central Bank. “If there are no major shocks, we expect rates to be stable in the second half of the year,” says Alexei Gribkov, deputy general director of the Sravni.ru financial marketplace.

Maxim Buylov, Olga Sherunkova