Want to buy a car? Then, get the
maximum mileage from a car loan. But the interest rate is a mystery. It
depends on a wide range of factors the amount you need, the car you
choose, the dealer, your employer, designation, income category… the
list is long. The face of the Indian car finance market is changing
An employee of a software company will have the luxury of a lower rate of
interest, compared to his counterpart in a manufacturing company.
If he is earning a salary of around Rs 3.5-4 lakh, the deal gets even
better. He need not pay the customary penalty for pre-closure.
Car finance industry sources say car model and tenure determined the
interest rate earlier. Now, other things are getting into the list. For
instance, you can even walk away with 100 per cent finance, if you have a
high-paying job and own a house.
“Interest rates on car loans have dropped to 7-8 per cent,” says a source
at ICICI Bank. As a result, 90 per cent of cars sold at present are
running on loans. A city like Bangalore disburses loans worth Rs 100 crore,
on a monthly basis. The picture is expected to get even bigger in the