But rules on repossessions could still be updated or changed if the FCA makes alterations during the consultation process.
A ban on repossessions was initially put into place for 31 October 2020 but this was later extended as the effects of the pandemic continued.
However, the FCA said that restricting repossessions for those struggling with payments would not be in the interests of the driver.
They warn drivers stuck in existing policies could end up owing more in the long run due to high-interest rates.
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The FCA said their approach still offers “appropriate protections” as firms would only repossess cars as a “last resort”.
Bank hard-sell & cheaper loans drive auto financing
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Auto financiers and dealers say the current buzz is led by the aggression of PSU lenders, which are offering rates lower than private financiers. However the uptick is restricted only to passenger vehicles and not two-wheelers and commercial vehicles.
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(This story originally appeared in on Jan 11, 2021)Chennai: Cheaper loans, aggressive options from public sector banks and a general reluctance to use cash for cars has led to an increase in auto financing penetration in passenger vehicles from 75% at the beginning of 2020 to around 80% now.
Auto financiers and dealers say the current buzz is led by the aggression of PSU lenders, which are offering rates lower than private financiers. However the uptick is restricted only to passenger vehicles and not two-wheelers and commercial vehicles.
(Representative image)
CHENNAI: Cheaper loans, aggressive options from public sector banks and a general reluctance to use cash for cars has led to an increase in auto financing penetration in passenger vehicles from 75% at the beginning of 2020 to around 80% now.
Auto financiers and dealers say the current buzz is led by the aggression of PSU lenders, which are offering rates lower than private financiers. However the uptick is restricted only to passenger vehicles and not two-wheelers and commercial vehicles.
ICICI Bank head (secured assets) Ravi Narayanan said: “In addition to various favourable macroeconomic factors, the all-time low interest rate is the key element for increased penetration of car finance as it boosts the sale of passenger cars. Additionally, there is a significant rise in demand for used cars for personal mobility. This too is leading to more customers opting for vehicle finance.”
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Car or automobile finance is a sum of money borrowed by consumers to purchase a car. It provides an option to buy vehicles upfront and pay later, in equated monthly installments. In addition, car finance depends on various factors such as income, credit score, and credit history of the borrower. Banks, original equipment manufacturers (captive finance), financial institution, and credit unions are some of the major distribution channel providing car finance solutions. Furthermore, a borrower can specifically apply for a car loan; however, consumers predominately prefer a personal loan for financing cars, which follows most of the same rules and procedures that apply to other loans.
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