According to the statement from the BRSA, the upper limit for the amount and duration of the vehicle loan is increasing. Accordingly, the maximum number of installments in loans are as follows;
· For cars worth 400 thousand liras or less (approximately 29 thousand dollars); Credits are limited to 70% of the purchase price and 48 months maturity.
· Automobiles ranging from 400 thousand to 800 thousand liras; Credits are limited to 50% of the purchase price and 36 months maturity.
· Automobiles ranging from 800 thousand to 1.2 million liras; Credits are limited to 30% of the purchase price and a maturity of 24 months.
· Automobiles ranging from 1.2 million to 2 million liras; Credits are limited to 20% of the purchase price and a maturity of 12 months.
· Vehicle loans cannot be given to vehicles with a cost of more than 2 million TRY.
The old limits were as follows:
· 70% credit limit and 48-month maturity for 0 – 120.000 TRY
· 50% credit limit and 36-month maturity for 120.000 – 300.000 TRY
· 30% credit limit and 24-month maturity for 300,001 – 750,000 TRY
· 20% credit limit and 12-month maturity for 750.001 – 1.500.000 TRY
· 0% credit limit for over 1.500.001 TRY
While retail individual customers can use loans according to determined limits and terms, businesses can use loans as they wish. Automotive credit limits and maturity numbers have been increased. The regulation is expected to have a positive impact on sales. If interest rates also decrease, the effect on sales can be expected to be more positive. In this context, the determined limits will bring serious movement to the market, which came back from the stagnation of retail sales in January and February.
In the last 2-3 months, there has been a serious increase in vehicle prices, like every product group that has been directly affected by import-sourced costs. For this reason, the update in installments and credit limits did not meet the need, the update was a necessary and demanded phenomenon by the industry. The fact that the market prices of both new and second-hand vehicles increased significantly, and the credit limits and maturities remained at an unfavorable level, caused the sales to stagnate and the end user to abandon their demand. Therefore, we think that the regulation made is positive for the automotive industry.
While credit utilization is an important factor, it is not the only factor. The course of interest rates is also important. Recently, the policies implemented by the Ministry of Treasury and Finance and the Central Bank are to keep interest rates low and to increase real sector investments and demand. Since the decrease in interest rates will affect credit utilization positively in terms of cost, it will also be reflected in sales. Of course, in order to achieve this, the necessary macroeconomic and market-based conditions must be created. Another important demand on the consumer side is to reduce the tax-related burden, especially SCT, on vehicle prices. At the point of reviving the domestic market in Turkey, we also attach importance to the tax burden, which may affect the demand for middle and upper segment vehicles, for the sector.
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