BAKU, Azerbaijan, Mar.11
By Sadraddin Aghjayev – Trend:
The conditions for car loans in Azerbaijan are such difficult that even citizens with high wages have problems buying a car on credit, the local auto expert Eldaniz Jafarov told Trend on Mar.11.
According to Jafarov, in order to buy a car on credit, the client is required to pay 40 percent of the car's value at the first stage.
"The remaining amount is paid by the bank at 16 percent per annum. This interest rate, given that the loan term is 3-5 years, makes the purchase impractical in terms of overpayment. Along with the interest rate, the local banks charge citizens commission fees on banking transactions and require mandatory CASCO insurance. All this makes the terms of loans unsuitable for buyers," he added.
The expert also said that the Azerbaijani government may soon soften the conditions for issuing loans for the purchase of cars.
“At the state level, the policy of importing electric vehicles, hybrid and hydrogen cars into the country, as well as the conditions for issuing loans for the purchase of new cars, should be completely revised,” noted Jafarov. “The first installment for the purchase of a new car should be equal to 20 percent of its value, the annual lending rate should be at the level of 9-10 percent, and the commission services of banks and the cost of compulsory CASCO insurance should be reduced by 50 percent.”
Besides, he informed that the abovementioned requirements for banks when registering a car purchase on credit were put forward by the Central Bank of Azerbaijan (CBA).
"If the CBA changes the policy of granting loans for buying a car, then the car fleet of our country will be able to renew itself in the shortest possible time," concluded Jafarov.
The Azerbaijani Cabinet of Ministers is carrying out relevant work on the application of new incentive measures in the field of lending to the purchase of new electric vehicles and cars.
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