With the stringent steps being taken by RBI, the latest news they have to offer you is that, auto loan rates are going to increase by 50 basis points .i.e 0.50%, since 1 basis point =0.01 %.
Although the change in rate may appear tiny, but it can have a huge impact on your finances. If you ought to buy a Maruti Swift valued at Rs. 4.2 Lakh after the new rate has been applied, then, a loan amount of Rs. 3 Lakh will be provided. Your EMI will go up by Rs 75 monthly, and eventually, you will be paying Rs 2,700 more than what the previous loan applicants had to pay.
The main reason, why most banks do not seem to be very eager to raise their auto loans immediately is because, these rates are much lower than what was in pre-2006, where the interest rate level was from 15-18%. Since there has been a considerable increase in the sales in the Indian car market by about 30% from 2006 till date, the interest rates might not be increased.
You can enjoy, lower auto loan deals from state run banks like SBI, Punjab National Bank and Bank of Baroda, who offer at rates between 8.5-12% unlike private banks who offer auto loans at 10-14%.