In Ukraine car loans revived. The cost of loans for new cars at some point reached 21-24% per annum, but now has fallen to an average of 5.5-16.5%. At the same time, new cars on credit already account for more than 12% of the total number of purchased cars (before the big war it was 23%).
This was told to GLOBAL HAPPENINGS by Sergey Kiporenko, the head of Globus Bank’s car lending department. According to him, in 2023, auto loans are mainly offered. for a period of 7 years with a down payment of 20% the cost of a new car (the amount of accrued interest depends on the amount of the first installment).
The expert explained that the auto loan market collapsed after the start of a full-scale invasion of the Russian Federation in Ukraine. The number of cars bought on credit fell to 2-3%. But after the dismissal of the Kyiv, Sumy and Chernihiv regions, car loans began to resume, albeit at higher rates. Then they asked for up to 24% per annum, and Ukrainians are not ready to buy new cars on credit under such conditions.
In 2023, the situation has changed: rates have dropped significantly (to an average of 5.5-16.5%), and demand for car loans has gone up. As a result, the dynamics of car loans issued compared to the start of a large-scale military invasion significantly improved:
- in January 2023, the number of new cars purchased on credit amounted to 9% of the total number of transactions;
- in February this figure rose to 10%;
- in March and April of the current year – up to 12%.
“Many processes in the country’s economy are closely interconnected: the resumption of car loans, the development of deposit programs indicate an increase in confidence in the banking sector. In turn. supplies of new cars to Ukraine resumed“, – explained Kiporenko.
According to the banker’s forecast by the end of the year interest rates may fall by an average of 3-5%. “Sales of new cars have almost reached the pre-war level, which means the resumption of the work of distributors, suppliers of new cars in Ukraine, an increase in the number of loan offers from financial institutions,” Kiporenko said.
However, the demand for auto loans depends on the region. According to the results of January-April 2023, the top included:
- Kyiv – 48.6% of the total number of car loans issued;
- Vinnitsa – more than 10%;
- Poltava – almost 7%.
“By all indications, this dynamics will be observed in the next few months. The advantage of Kiev is undeniable, because for potential buyers of cars on credit, the most important thing is the region’s security, a line of choice, a network of branded service stations, etc.,” Kiporenko said.
As GLOBAL HAPPENINGS reported, for the first time in a full-scale war, Ukrainians have sharply increased the number of microcredits taken. At the same time, clients traditionally overpay on interest – real annual rates sometimes exceed 200 thousand percent. Debts to MFIs (microfinance organizations) are also growing.
Source: Obozrevatel
I am a journalist who writes about economics and business. I have worked in the news industry for over 5 years, most recently as an author at Global Happenings. My work has focused on covering the economy news, and I have written extensively on topics such as unemployment rates, housing prices, and the financial crisis. I am also an avid reader and have been known to write about books that interest me.
