Used cars are twice as likely to be bought on loan

The share of car loans in total sales of used cars reached 15% at the end of 2023, almost doubling compared to the previous year. This year the trend will no longer be as pronounced: although the segment of used cars is less susceptible to the influence of high rates, the Russian car market is becoming saturated with new Chinese cars of different price categories, which will reduce the attractiveness of buying used cars on credit.

The share of loans issued for the purchase of used cars in 2023 amounted to 15% of their total sales. Thus, over the past year, Russians spent 5.8 trillion rubles on used cars, as follows from the Otkritie Auto study (automotive business unit of Otkritie FC Bank). At the same time, issued car loans for such cars amounted to almost 890 billion rubles. In 2022, the share of car loans in this segment was only 8%: the total volume of purchases amounted to RUB 4.3 trillion. with a volume of issued loans of 361 billion rubles.

In VTB’s sales structure at the end of last year, used cars accounted for about 70% of the total number of loans issued. In total, the bank’s clients received more than 140 billion rubles for the purchase of such vehicles, which was many times higher than the result of 2022. The growth of credit issues in the secondary market segment in 2023 was generally due to both the growth in the volume of the used car market itself and the rise in prices on it, explains Marina Dembitskaya, head of Otkritie Auto.

In 2024, market participants expect a slowdown in the growth trend in the share of car loans in sales of used cars. In the coming year, against the backdrop of market recovery, the trend will change and borrowers will increasingly choose new cars, says Vladimir Vysotsky, head of the partnership sales department for VTB cars.

According to data for partial January 2024, the share of loans for used cars in Rosbank is 23.5% of total issues, which is slightly higher than the market average.

According to Vyacheslav Yakubchik, head of the development department for partnership programs and strategic segments at Rosbank Auto, the share of loans for used cars in the loan portfolio will gradually decrease. This is due to the saturation of the new car market and available offers in all price segments of new cars. “Much will depend on the dynamics of the key rate, which affects market loan rates, as well as on the situation with sales of new and used cars and their prices,” admits Expobank Managing Director Dmitry Maslov.

In 2024, the credit market lives in a situation of rising rates. But the key rate of the Central Bank, which through the corresponding bank rates significantly influences the lending market for the purchase of new cars, is not a powerful factor in the segment of used cars, points out Alexander Vasiliev, director of the group for servicing companies in the automotive industry of the DRT company. The fact is that the share of the down payment when applying for loans for used cars is, as a rule, more significant than for new cars, and the loan rate does not play such a role for the borrower as when purchasing a new car on credit. “In 2024, we cannot rule out a moderate, but still growth in the used car lending market,” says Mr. Vasiliev.

Polina Trifonova