Russian dealers expect the market to shrink by 8-10 percent

After the Central Bank’s decision to restrict car loans and increase surcharges to risk coefficients comes into force, sales of used foreign cars and new Chinese cars may noticeably decline already in the third quarter of this year. The new Central Bank requirements are aimed at combating over-indebtedness, which may negatively affect the entire banking sector

Car sales in Russia may decline by 8-10 percent due to the Central Bank tightening the conditions for issuing car loans. This was stated by the Russian Automobile Dealers Association (ROAD). From July 1, the regulator decided to introduce increased surcharges to risk ratios for clients with a high debt ratio (DLI) – they will range from 0.7 to 2.

“Financial institutions will begin to provide fewer car loans to borrowers with an already fairly high debt load. We include among them those who spend more than half of their income on payments,” the Central Bank explained. New requirements will force banks to raise rates on car loans.

According to ROAD, we are talking about 1.5-2 percent. At the same time, “stops” will be set in scoring systems for clients with a PTI above 50 percent as for persistent defaulters.

The decrease in the number of issued car loans will also affect sales. According to Maxim Davidenko, head of the product and service development department of Alfa-Leasing Group of Companies, a decline of 8-10 percent is expected in the segments of used foreign cars and new Chinese cars. The effect, according to ROAD, will be noticeable in the third quarter of 2024.

Something new: fresh versions of familiar models