Low interest rates 'stimulate' demand for car loans

Car loan interest rates are low, boosting demand for cars

Just choose a car, let the bank take care of the "cheap capital"

That was the joke of Mr. Nguyen Van Quang, born in 1983 in Tan Phong commune (Ninh Giang), when we met him at the used car showroom Vua Gam Cao on Nguyen Luong Bang street (Hai Duong city).

Doing business in the field of aluminum and glass processing and often having to go on business trips out of town, Mr. Quang bought a pickup truck in 2022. “I had planned to buy another car in 2 years for personal use, occasionally taking my wife and children out. Recently, referring to the loan interest rates of banks, I found that the loan interest rate was maintained at an acceptable level, the monthly payment for the loan of several hundred million still needed to buy a 2021 Kia Seltos was suitable for my income. Therefore, my wife and I decided to borrow money to buy it right now, not waiting 2 more years,” Mr. Quang shared.

Mr. Quang is the 19th customer to buy a car at Vua Gam Cao Showroom this month. “Normally, the highest number of cars sold is in the last 3 months of the year, especially used cars. However, the benefits of bank loans have helped us maintain sales at 40 cars/month from the end of 2024 until now,” said Mr. Do Chi Cong, CEO of this showroom.

Mr. Tran Minh Hieu, born in 2000 in Tu Ky town, really likes the new Mazda CX-5, but his only obstacle is lack of money. Calculating the total cost, including the purchase price, registration fee, inspection fee, etc., this car has a "rolling" price of nearly 900 million VND. With about 300 million VND remaining, in addition to waiting until he has enough money to buy, Mr. Hieu has 2 options: borrow from family, friends, relatives or borrow from the bank.

“It will probably take a few more years to save up the remaining 300 million VND. My relatives can lend me this amount of money without interest, but the loan period is only 1-2 years, and when they need it, I will have to find a way to pay it back, which is very difficult to calculate. On the contrary, if I borrow from a bank, I know the repayment schedule as well as the monthly payment. I know that I only need to choose a car and the bank will take care of the money, but the only thing I worry about is the interest rate,” Mr. Hieu added.

Low interest rates give people more opportunities to choose to buy higher-segment, better-quality cars. In the photo: Customers come to learn about cars at Hai Duong Auto Joint Stock Company - Mazda Hai Duong

Mr. Hieu contacted several banks. After calculating, assuming a loan of 300 million VND with an interest rate of 7%/year, the first month he would have to pay nearly 4.9 million VND, including principal and interest, then gradually decrease. This is the monthly expense that Mr. Hieu and his wife can accept.

Low interest and fast loan combo

At BIDV Thanh Dong, the interest rate for car loans is currently at a minimum of 5.5%/year for the first 6 months after disbursement, 6.3%/year for the first year, 6.6%/year for the first 18 months, and 6.8%/year for the first 2 years. This is the loan interest rate that has been maintained since the end of 2024 until now.

Loan term for new cars is up to 8 years. Used cars can be borrowed for up to 5 years, the age of the car must not exceed 7 years at the time of loan application.

For some other banks such as Sacombank Hai Duong and VIB Hai Duong, interest rates are currently at 6.5%/year, 1 - 1.5%/year lower than the second half of 2024.

The actual interest rate depends on the credit quality and the regular use of products and services of each customer. After the preferential period, the preferential loan interest rate is converted to a floating loan interest rate, according to the formula of the mobilization interest rate plus the margin at each time.

Interest rates are like that, the loan process for auto loans is also in the direction of creating convenience for people. “In theory, the time from when customers provide complete documents to disbursing our auto loan is 5 days. However, we will base on the needs of each customer. Some customers want to speed up the disbursement to pay for the car purchase, in order to register the license plate on the right day and vice versa. Therefore, in reality, there are cases where the loan will be disbursed after only 2 days,” said Ms. Nguyen Thi Hong Nhung, Head of BIDV Thanh Dong Personal Customer Department.

According to many banks in the province, low lending interest rates will create momentum to promote retail credit, focusing on the demand for home and car loans in the coming time (illustrative photo)

“Moreover, compared to the valuation of many other types of assets, such as real estate, the valuation of cars is often much faster,” said Ms. Cao Thu Thao, Head of Sacombank Hai Duong Personal Customer Department.

According to Ms. Thao, new cars have a listed price clearly stated in the sales invoice, so the car appraisal is about used cars. “We have a policy of linking with many car showrooms. Therefore, whenever people have a need, we will send credit specialists and related departments to the showroom to discuss directly. Normally, after only 2-3 hours, we can notify people of whether or not to approve the loan,” Ms. Thao added.

In addition to the need for car loans for family use, low interest rates also help promote the need for car loans for business use. VIB Hai Duong has just coordinated with Hoa Binh Construction and Mechanical Company Limited to lend customers to buy 15 trucks, each truck borrowing an average of about 400 million VND.

“Following the Prime Minister’s instructions, banks, including ours, have basically maintained low deposit interest rates, creating conditions to maintain low lending interest rates. This helps consumers have more opportunities to choose to buy higher-end, better-quality cars. People in the transportation service business also have the opportunity to expand their operations,” said Mr. Ha Thanh The, Director of VIB Hai Duong.

HA KIEN

Source: https://baohaiduong.vn/lai-suat-thap-kich-nhu-cau-vay-mua-o-to-407613.html