Economical approach: why in Russia the average term of a car loan rose to record levels

In October 2022, the average term of a car loan in Russia increased by 8% compared to the same period in 2021 and reached five years for the first time in the history of observations.

Such data on Tuesday, November 22, were published by specialists of the National Bureau of Credit Histories (NBKI).

According to the organization, the longest average loan repayment time was recorded in the Krasnodar Territory (5.19 years), Khanty-Mansiysk Autonomous Okrug (5.17), Orenburg (5.16), Rostov (5.14), Volgograd and Tyumen regions (for 5.13 years).

In general, the average loan term has grown in all regions of Russia compared to last year, analysts say.

“The increase in the term of lending in this segment is due to the desire of both banks and citizens to reduce the debt burden by reducing the monthly payment on car loans.

In other words, the longer the term of the car loan, the less the borrower pays on it every month,” said Alexey Volkov, Marketing Director of the NBKI.

Making a loan for a longer period makes it possible to make its service more comfortable for citizens, which was especially important during the jump in the key rate, Artyom Deev, head of the AMarkets analytical department, stated in a conversation with RT.

At the end of February, the Central Bank sharply raised its key rate to a record 20% per annum.

Such a decision was necessary to stabilize the situation on the financial market and contain the sharply accelerated inflation in the face of sanctions.

As panic in the financial sector subsided and inflationary risks decreased, the Central Bank systematically reduced the indicator and lowered it to 7.5% per annum in the fall.

“After a sharp increase in the rate, the cost of a car loan increased by 22-25%.

Therefore, so that the demand for such loans does not fall sharply, banks offered borrowers a longer loan term.

In addition, buyers have begun to choose a car more carefully, they are trying to find the most profitable option against the backdrop of rising car prices,” Deev added.

It should be noted that for the first eight months of 2022, the weighted average cost (calculated based on the average values ​​of prices recommended by the distributor and sales volumes for each model) of a new passenger car in Russia amounted to 2.29 million rubles.

Over the year, the indicator increased by 22%, according to the data of the analytical agency Avtostat.

• Engines at the GAZ automobile plant in Nizhny Novgorod

• RIA News

• © Ekaterina Chesnokova

According to experts, such dynamics is partly due to the reduction in the range of new foreign-made cars.

Many foreign companies began to massively leave the Russian market in the spring against the backdrop of large-scale Western sanctions against Moscow.

In total, more than 205 of the 600 largest foreign companies in Russia have already restricted their activities, according to data from the Center for Strategic Research.

The vacant niche in the industry was gradually occupied by manufacturers from China.

So, since the beginning of 2022, the share of Chinese car sales in Russia has tripled and approached 30%.

According to Avtostat analysts, in October 2022, Russians bought more than 12.7 thousand passenger cars from China.

At the same time, sales of “Chinese” brands are growing for the third month in a row, while purchases of other foreign brands are noticeably declining.

“The entry of Asian companies into the Russian car market will support the supply structure.

In particular, the growth of the presence of Chinese players is able to partially replace the departed Western brands in the industry,” said Artyom Deev.

According to him, the share of the automotive industry from China in Russian showrooms will continue to grow in the foreseeable future.

So, in 2023, the country's market can be almost completely divided between AvtoVAZ and manufacturers from China, and the share of the rest will not exceed 15%, the specialist believes.

According to Avtostat, the share of sales of Lada cars in the Russian market in October increased to 39.5% compared to 19.2% a year ago.

Moreover, in 2023 the concern plans to significantly increase production and produce more than 400 thousand cars against 220 thousand in 2022.

preferential incentive

In October, 45.2 thousand new cars were sold in Russia.

This is 62.8% less compared to the same period in 2021, according to data from the Association of European Businesses.

At the same time, back in April of this year, the volume of transactions on the market collapsed by almost 80%.

According to experts, the gradual recovery in sales is largely due to support measures from the state.

Recall that the program of preferential car loans in the country started working again in July.

You can get a loan on favorable terms when buying Russian-made cars of the UAZ, Lada and GAZ brands worth up to 2 million rubles, produced in 2022.

In this case, the discount will be 25% of the price of the vehicle in the Far Eastern Federal District and 20% in other regions of the country.

Families with underage children, doctors, teachers and drivers who are buying a vehicle for the first time are eligible to take advantage of the initiative.

Last week, Vladimir Putin supported the decision to extend the program to servicemen, including those who were mobilized, their families, and military pensioners.

The corresponding proposal was previously voiced by the head of the Ministry of Industry and Trade Denis Manturov.

According to the ministry, the total volume of sales under the concessional lending program at the beginning of November amounted to 34.1 thousand cars, and the Russians were able to receive discounts for 7 billion rubles as part of the campaign.

Initially, the initiative was expected to end at the end of this year.

However, as TASS was told in the Ministry of Industry and Trade, the program has been extended to 2023.

Preferential lending in the current environment is one of the key factors supporting the production of cars in Russia.

This opinion was expressed in an interview with RT by the chief analyst of TeleTrade, Mark Goykhman.

As the expert noted, not only Russian brands fall under the parameters of the action, but also the Chinese brand Haval, which produces cars at a plant in the Tula region.

“According to various estimates, the restoration of sales volumes in Russia to the level of the pre-pandemic 2019 may take several years.

At the same time, such factors as an increase in production at Russian sites, including those left after the departure of a number of foreign brands, as well as imports, including parallel ones, should positively influence this process,” Goykhman concluded.