I think we now know why Maruti’s low cost car was revealed to the banks earlier this month, they were probably pitching it to the banks to see if they would grant loans for people who want to buy it!
Banks in India are saying that they would only grant loans to buy the Tata Nano to second time car buyers instead of motorcycle owners who are looking to upgrade to a car. “We will not look to finance the purchase of the Tata Nano for those who already own a motorcycle but are stretching their budgets to buy a car. We have faced numerous problems of motorcycle loan defaults,” said an unnamed banker in an interview with Business Standard in Mumbai.
Rates to finance the Tata Nano are also expected to be higher at 18 to 19% instead of a usual new car interest rate of 13 to 14%, although it is still lower than the usual used car interest rate of 22%. This is because usually low income owners that buy such cars usually have their finances stretched to the limits every month, especially in the wake of astronomical fuel prices. This is also why Proton cars usually have higher interest rates than foreign makes in Malaysia.
After dabbling for years in the IT industry, Paul Tan initially began this site as a general blog covering various topics of personal interest. With an increasing number of readers paying rapt attention to the motoring stories, one thing led to another and the rest, as they say, is history. An avid electronic gadget aficionado as well as big-time coffee lover, he's also the executive producer of the Driven motoring TV programme.
it make sense…
Defaulters. Next time, ukur baju di badan sendiri.
interest so high and would discourage buyers.
I really symphatize the poor. Already poor, and still have to get loan from bank with such “cekik darah’ loan interest. Better save enuf and pay 1 shot.
Makes sense, more like I think compulsory not to give any kind of loan to Nano and Maruti. People cannot pay back. Banks are paranoid because of the credit crunch
19% interest?? That’s too astronomically high and super crazy. Even our Ah-Long dont charge that much. Dont banks over there got national-regulated BLR?
If lending-interest is so high, deposit-interest should be high too. Can’t imagine how those poor people live if they are continously suppresed with sky-high interest rates.
On another note, I expect Bank Negara will increase its OPR, and BLR will follow suit. So brace for higher new car installment payments!
wah 19% so high the interest