Two-thirds of car loans issued by banks are for used cars
[ad_1]
The active expansion of Chinese brands to the Russian car market cannot yet reverse the trend towards an increase in the share of used cars in bank credit sales. On average, used cars account for 64% of loans in the market, and in the portfolios of some banks, the share reaches 80%. However, experts emphasize that the number of quality offers on the used car market is declining.
As follows from the Kommersant survey, most car loans are still issued in the Russian Federation for used cars. Depending on the bank, transactions with used cars account for 30% to 80% of the loan volume. In general, their market share by the end of the half year exceeded 64%, says Frank RG project leader Stanislav Sukhov.
The ratio will remain at the current level or even shift further towards used cars, market participants are sure, despite the active expansion of Chinese brands in Russia. Redistribution in the segment of car loans will depend on the pace of establishing parallel imports, emphasizes Yegor Lopatin, Deputy Director of the NKR Financial Institutions Ratings Group. However, the share of parallel car imports in bank credit sales has not exceeded 6% since the beginning of the year (see “Kommersant” dated June 26).
“Manufacturers are introducing more and more Chinese models of various classes and price levels to our market,” says Ekaterina Konova, director of the Rosbank Auto retail car loan department.
Nevertheless, the market for new cars is recovering “slower than we would like,” Alexander Potapov, an expert at Otkritie Avto (auto business unit of Otkritie FC Bank), admits: “The ratio of the car market in the segment of new and used cars continues to change towards the latter. Based on registration statistics for January-May in 2022, there were six used cars for every new car sold, this year there are already eight.”
Expectations of a shortage of used cars meanwhile are not justified. “The market for new cars is gradually saturated,” explains Ekaterina Konova. “When buying a new car, consumers, as a rule, trade in the old one or put it up for sale.”
Against this backdrop, the car loan market continues to break records. “In the first half of the year, car loans in Russia reached RUB 600 billion, a 13% increase over the same period in the record year 2021. June is also marked by a historical indicator: the Russians received about 125 billion rubles for the purchase of vehicles,” VTB notes. However, the growth is still mainly provided by the continuing rise in the cost of cars while lagging behind the growth rates of transactions in units.
A stable increase in the share of transactions with used cars requires banks to adapt lending conditions and develop new programs, especially since the average age of cars is growing.
Rosbank, for example, in the spring increased the maximum age of used cars available for lending, and in June set the term for such loans to eight years (the standard for the market is five years).
Loan rates for used cars tend to be higher than for new ones. So, in VTB the difference is at least 1 percentage point. Traditionally, lending risks in the used car segment are higher, so rates are also growing, explains Dmitry Maslov, managing director of Expobank. The liquidity of the car, which is pledged as collateral for the loan, is important for the bank, Alexander Vasiliev, senior manager of the DRT automotive industry group, adds.
Used car insurance is also more expensive. The average hull price for a new car in 2023 was 40 thousand rubles, for a used car – 60 thousand rubles, notes Elena Fedorova, head of the voluntary retail insurance department of IC Rosgosstrakh: “The main difference in price is a different mix of cars. New cars in our market today are represented by domestic and Chinese brands, while in the used segment there are representatives of brands from other countries, including those that have left the market, and repairs are now more expensive for them, which affects the price of the policy.”
[ad_2]
Source link