3 out of 5 Indians prefer getting their cars financed, the study shows.
07 Jun 2023 | 5002 Views | By Autocar Pro News Desk
Auto tech company CARS24’s financial services arm has achieved a 100% year on year increase in loan disbursements and surpassed the Rs 2,000 crore milestone since inception. CARS24 obtained an NBFC licence in 2019, cementing its position as a full-stack solution for pre-owned car buyers.
Here are some of ...
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Auto tech company CARS24’s financial services arm has achieved a 100% year on year increase in loan disbursements and surpassed the Rs 2,000 crore milestone since inception. CARS24 obtained an NBFC licence in 2019, cementing its position as a full-stack solution for pre-owned car buyers.
Here are some of the trends that are being observed:
75% of Indians in Tier2 and 3 cities opt for car financing
In non-metro cities, 75 percent of Indians in Tier 2 and 3 cities are opting for the convenience of car financing, while even in bustling metro cities, 60 percent of Indians have joined the car financing movement. The financing boom extends across cities, with Tier 1 markets such as Delhi-NCR, Bengaluru, and Hyderabad and Tier 2 cities like Lucknow, Surat, and Jaipur, witnessing significant loan uptake. Even Tier 3 cities like Patiala, Alwar, and Bharuch have joined the loan frenzy, making used car ownership more accessible across India.
3 out of 5 Indians prefer getting their cars financed
The average age of people preferring to finance their cars stands at 32 years, indicating a strong presence of working millennials, including salaried employees and young entrepreneurs. This demographic shift is accompanied by a growing preference for the convenience and flexibility offered by car financing options.
With an average EMI ranging from Rs 10,500 to Rs 11,500 per month, with a tenure of up to 72 months, car financing has become a viable solution for many. The data reveals that every 3 in 5 customers choose to finance their cars.
Women embrace car financing
There has been a 45% increase in loans disbursed for women every year. It also highlights the need for tailored financing solutions that cater to the unique preferences and requirements of women buyers. Over 60 percent of first-time car buyers prefer financing
According to CFSPL’s data, over 60 percent of first-time car buyers have financed their cars in the last one year. This shift can be attributed to several factors, including the rising costs of vehicles, the desire for newer models with advanced features, and the availability of attractive loan packages tailored to suit the needs of first-time buyers.
Hatchback Models: Swift, i10, and Kwid lead the way in popular car financing choices
Affordable hatchback models such as Maruti Swift, Hyundai i10, and Renault Kwid havesecured their place at the forefront of popular car financing choices. These vehicles have captured the attention and preference of car buyers looking for a cost-effective yet reliable transportation solution. These compact vehicles offer a cost-effective solution for individuals seeking car ownership, with lower price points compared to larger car segments. The availability of car financing options allows buyers to spread the cost of a hatchback over time, making it a more manageable financial commitment.
Additionally, hatchbacks are known for their fuel efficiency, making them a practical choice for daily commuting and reducing overall ownership costs. With their combination of affordability and practicality, hatchbacks have become a top choice for individuals seeking car financing solutions.
March 2023 marked a significant milestone in India’s car financing landscape, with the highest loan disbursement recorded in a single month.
March 2023 was a record month
According to CFSPL, customers enthusiastically availed of loans amounting to an impressive Rs 150 plus crore during this period, indicating a substantial surge in car financing. This trend aligns with previous years’ data, where March consistently witnesses the highest number of cars being financed, showcasing a recurring pattern. March serves as an opportune time for car purchases due to several favourable factors.
The commencement of the new financial year in India prompts individuals to make significant investments, including acquiring cars. Moreover, end-of-season discounts and promotional offers provided by car dealerships incentivize customers to finalise their purchases during this period. Furthermore, the utilisation of yearly bonuses or savings further contributes to the surge in car financing, as individuals leverage their financial resources to acquire vehicles.
The notable increase in loan disbursement during March not only signifies the growing popularity of car financing but also highlights the importance of timing and market dynamics in the car purchasing process.
CARS24 Co-founder and CFO Ruchit Agarwal said, “Our ultimate objective is to ensure that car ownership becomes accessible and convenient for everyone.”
Attractive interest rates, zero down payment, and flexible repayment terms provided by leading car financing providers, such as CARS24, have played a pivotal role in igniting this financing revolution.