Discounts drive car finance rates under 10%

Following aggressive dealer discounts and cash-discounts by manufacturers, car finance rates have fallen below the 10 per cent mark. While the base rates being offered by car financiers are around the 12-13 per cent mark, consumers are enjoying the benefits of the subsequent discounts being offered by the manufacturers and dealers. “While the rates are around the 12-13 per cent mark, these rates are around 9 per cent for premium cars,” according to Kotak Mahindra Primus chief operating officer Pankaj Desai.

Car demand in April has been sluggish, which is an industry phenomenon subsequent to the fiscal-ending month of March when manufacturers try to push volumes to meet targets. Mr Desai, however, said that Kotak has been able to maintain its margins at a steady level.

Indiacar CEO and owner of Maruti dealership Vitesse Ashwin Sanghi feels that as far as the B and C segments are concerned, the rates are very competitive. He, however, added that while April had been very sluggish in terms of car sales, the initial indications for May show a revival. Dealers say that they are currently taking a hit on their margins to push discounts.

General Motors saw a 41.2 per cent drop in sales at 803 units as against 1,367 units in March. Honda Siel, which sold a record 1,581 cars in March, saw a sharp drop in sales to 770 cars.