The interest rates on car loans have climbed around 1 per cent (100 basis points) in October 2005, year on year.
The operating interest rates on car loans for a term of three-five years, which were around 9 per cent in October 2004, have gone up to the level of 10 per cent this October, said leading car dealers in Mumbai.
Inflation, rising cost of funds and increasing global interest rates have encouraged banks and financial institutions like ICICI Bank and HDFC Bank to up their interest rates, said a financial analyst in Mumbai.
The interest rates on four-wheelers have moved ahead of the housing interest rates that have gone up just 0.5 per cent or 50 basis points.
Over 70 per cent of car buyers in the country go in for loans, said leading car dealers. Almost all the dealer-point loans are routed through either ICICI Bank or HDFC Bank.
The operating interest rates on Maruti cars have gone up to 10 per cent this October from 9 per cent in October last year. While Maruti 800 and Zen now attract 10 per cent interest, Swift attracts 9.75 per cent. For used Maruti cars, the interest rates have remained more or less the same at 14-15 per cent as last year.
Loans on Toyota Camry/Corolla bear an interest of 9.5 per cent, while those on Toyota Innova 9.75 per cent. Loans on these two brands demanded 9 per cent interest a year ago.
In case of Hyundai cars, the interest rates have climbed 1.25 per cent. Last year, loans on Hyundai's Santro, Getz and Sonata attracted interest rates in the range of 8.75 per cent to 9 per cent. However, the interest rates have gone up to 9-10 per cent on these cars, said a Hyundai dealer.
Last year, Tata Indigo demanded an interest of 9 per cent and Indica 9.5 per cent. However, the interest rates on loans for these two cars now stand at 9.75 per cent and 10 per cent respectively. Almost at similar levels, Ford cars currently attract an interest of 9.5 per cent.
In case of Fiat, while a big car like Petra attracts an interest of 9.5 per cent, Palio loans charge an interest of 9.75 per cent.
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