Banks lower car loan costs

ISTANBUL

Three Turkish state-owned lenders, Ziraat, Halkbank and Vakıfbank, have lowered the monthly interest rates on car loans to support local production.

They slashed the monthly cost of the 18-36 months loans for passengers cars produced in Turkey and sold at a price between 50,000 and 120,000 Turkish Liras to 0.49-0.69 percent, the banks announced in a joint statement yesterday.

The loans will be made available for first-hand cars.

As part of the financing package, the banks have inked agreements with passenger car producers Fiat, Honda, Hyundai and Renault Mais.

The lenders will also extend 30-60 months loans at the monthly interest rates between 0.49 percent and 0.69 percent for commercial vehicles sold for 72,000 and 120,000 liras produced by Fiat, Ford, Isuzu Karsan and Temsa.

The financing package will be made available between Oct. 1 and Dec. 31.

The latest data from the Automotive Distributors’ Association (ODD) showed that passenger car sales declined by 43.9 percent on an annual basis to 193,320 units in the first eight months of the year.

The light commercial vehicle market contracted nearly 52 percent year-on-year to 45,997 units sold in January-August.

Ali Bilaloğlu, the chairman of ODD, recently said that the Central Bank’s latest move to further cut its interest rates would likely to boost vehicle sales.

The Turkish Central Bank on Sept. 12 lowered its policy rate (one-week repo rate) by 325 basis points to 16.5 percent from 19.75 percent.

“The monthly borrowing costs of consumers may ease toward 1 percent. There is no doubt, this will have a positive impact on first-hand car sales,” Bilaloğlu said on Sept. 22.

“The ODD’s latest estimate for vehicles sales for 2019 stood at 350,000 units. However, the rate cut can potentially push vehicle sales up to 400,000 units,” he said at the time.