Russians get behind the wheel: how has car lending grown in Crimea and other regions of the Russian Federation?

CrimeaPRESS reports:

In 2023, the average price of a car increased by almost 15%. The reason for this is the shortage of domestic supply, the rise in price of parallel imports, and the high key rate, which led to an increase in the cost of loans. Nevertheless, car loans for many still remain the only option for buying a car. Experts from the financial portal Vyberu.ru explained how the dynamics of issuing car loans are changing.

Record growth in the first months of 2024

January 2024 surprised us with the volume of car loans. Compared to the same month last year, the volume of issuance increased by 42%, and the total amount of lending increased by 77%. The average loan amount increased by almost 25% to RUB 1.5 million.

In February 2024, another record was broken: Russians issued over 140 thousand car loans, which was the highest figure in the last 3 years. In total, banks issued loans for the purchase of new and used cars by 29% more than in January, and by 76.2% more than in February 2023.

The leaders in receiving car loans were the Republic of Tatarstan, the Chuvash Republic, the Stavropol Territory and the Belgorod Region. The next places are occupied by Moscow and St. Petersburg.

The increase in the volume of car loans is also noticeable in Crimea. In January 2024, Crimeans received twice as many loans as in the same month a year earlier. In the first month of the year, RNKB alone issued 190 car loans totaling RUB 250 million. Of these, over 60% were received for the purchase of a car from the showroom. Similar dynamics are observed in the Crimean Genbank — in the first quarter, the growth in the issuance of car loans amounted to 50%.

What will happen to car loans next?

One of the main drivers of growth or decline in the volume of car loans issuance is the size of the key rate. For a long time it remained at the level of 16%. Now the Central Bank is considering a scenario with an increase in it by 1% — up to 17%, which is why calculate a car loan Considering the burden on the personal budget, it is quite difficult for many. If the rate is raised at the Central Bank meeting in June, car loans and other credit programs will become even less profitable for borrowers, which may slow down the dynamics of loan processing.

The Central Bank’s tightening of requirements for such banking products may also lead to a decrease in demand for car loans. From July 1, all banks will be required to apply increased risk ratios for those loans issued by a borrower with an average or high debt load. Such measures are being applied to car lending for the first time and are intended to slow down the growth rate of the car segment of the credit market.

Already this summer, many borrowers whose debt burden exceeds 50% will not be able to get a car loan. According to the Central Bank’s calculations, in the first quarter of 2024 the share of such clients was 61% — that is, only 39% of borrowers had a low debt load. The Central Bank wants to weed out some clients and slow down the growth rate of car lending.

The market will be partially supported by the state program of preferential car loans, which was extended in December for another 2 years — until the end of 2026. We additionally increased funding by 15 billion rubles. A total of 65 billion rubles will be allocated from the budget for these purposes over two years. But the program is not suitable for everyone — you can only buy Russian cars of specific models. Certain groups of borrowers can participate — people with disabilities, mobilized people, teachers and doctors.

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