India Automobile Finance

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India automobile finance shows various options on a roll, be it loans for two wheelers four wheelers or heavy vehicles, every bank is ready with their finance schemes to provide loans to interested applicants.

Automobile Finance Options in India

Car Loans
Car loans are slowly and steadily gaining ground with the rising incomes of the Indian middle class. Every day banks are coming up with better car loans schemes trying to provide lower interest rates and better repayment options hence making things easier for the people interested in purchasing a car

SBI Car loan:
SBI automobile insurance are easily available offering low interest rates, easy repayment options, no processing charges for old and new cars both. Key benefits of this loan offered by SBI are low interest rates which are calculated on reducing balance method which is the prime attraction of this loan, a repayment period of 84 months for salaried employees and 60 months for self employed, and no hidden costs or administration charges, no upper limit on the loan amount for a new car it can be 2.5 times of your net income but in case of used cars the maximum loan amount is ` 15,00,000

To avail a car loan a person should be
Between the age of 21-58 years
A permanent employee of a public sector undertaking/private company or a businessman.
A person engaged in agricultural or allied activities
And must have a net annual income of minimum `1,00,000

Fast Track Car loan:
Fast Track Car loan is a unique car automobile insurance plan offered by HDFC Bank which covers a wide range of cars and multi utility vehicles in India. The special features of this plan are: The amount of loan can go up to 100% of the value of the car with repayment tenure of up to 7 years, loans can be processed within 48 hours, and there are special interest rates for HDFC account holders.

The minimum and maximum age of the applicant should be 21 and 58 years respectively
The minimum income of the applicant should be ` 1,00,000 per annum
The applicant must have a telephone at his residence
The applicant should have 12 months of work experience in his current company and 12 months before that.

Two Wheeler Loans
Leading banks in India are providing two wheeler loans right from motorbikes to mopeds. These loans are available at attractive interest rates to attract new customers. Although Public sector banks are offering lower interest rates but they still lag behind in terms of services that are provided by Private sector banks.

Axis Bank:
Axis Bank's two wheeler loans is an easily available loan option for people aspiring to purchase two wheelers. The loan amount covered in this scheme is from ` 20,000 - 70,000 with repayment tenure of 12 - 36 months with low interest rates and easy documentation.

The minimum age for applying for this loan iin case of salaried individual is 18 years and 21 for self employed The applicant should have a minimum annual income of ` 60 - 75,000 depending on the model of the two wheeler he wants to purchase

Easy Loans:
Easy loans is a fast and hassle free finance scheme offered HDFC Bank. HDFC offers quick approvals, flexible payment options and easy repayment. The amount covered under this loan is 85 % of the value of the two wheeler with repayment tenure of 12 - 48 months.

You should be between the age of 21 - 65 years
You should have a minimum annual income of ` 54,000 if you are residing in
cities like Delhi, Chennai, Bangalore, Calcutta, Pune and ` 42,000 for all other cities.
You have to have a total work experience of minimum one year
You have to be residing in that city from the past one year
You have to have a phone in your residence

Bank of Baroda:
The two wheeler loan offered by bank of Baroda is an easy monthly installment low interest loan. The amount of loan ranges from ` 5000 to ` 1,00,000 with a repayment tenure of 12 to 60 months .

The applicant should be between the age of 21 to 58
The applicant should have a minimum annual income of ` 60 - 75,000

Heavy Vehicle Loans
Loans for purchase of heavy vehicles are granted to transport operators and those who are involved in the agricultural business. Banks finance up to 75 % of the cost of the heavy vehicle. The customer has to bring in the margin amount from his own source. The loan is then repaid on an monthly installment basis.

Tractor Loans:
Tractor Loans is a heavy commercial vehicle loan offered by HDFC Bank. Tractor loans cover customer segments using tractors for agricultural purposes. HDFC finances up to 85% of the value of the tractor with a repayment tenure of 12 to 84 months

The minimum and maximum age of the applicant should be between 18 - 60 years
He should have a minimum annual income of ` 1,00,000
He should possess either 5 acres of irrigated land or 10 acres of un-irrigated land.

Documents required in case of automobile loans

Identity Proof:
A copy of any document that can prove your identity - your passport, driver's license, voter ID, or PAN card.

Proof of Residence:
A copy of your passport, driver's license, ration card, or voter ID if you reside at the same place as entered in the above-mentioned documents will do. If you stay as a tenant, different from the one mentioned on your ration card, passport, or voter ID, you can produce utility bills (electricity or telephone) of the place as proof of residence.

Income Proof:
Salaried people need to submit their latest salary slip, Form 16 for the last financial year, and their bank statement for the last 6 months. Self-employed people need to provide their IT returns for the last 2 years as proof of income.

FDI in Indian Automobile Market

FDI in Indian Automobile Market recorded a 100 percent flow in the year 2002 which made it easy for foreign investors to access the industry. A whooping 1 million 4-wheelers entered the Indian automobile market in 2005-06.
Among the top countries contributing to FDI in Indian Automobile Market are America, Japan, Europe, and Korea have been responsible for the growth of automobiles in India. Currently, India is Asia' second largest two wheeler market after China and has shown a growth at a CAGR of 14.6 percent during FY 2001 to FY 2006.

The chief players in the Indian automobile industry are Hyundai Motor India Limited, Mahindra & Mahindra Limited, Hero Honda Motor Limited, TVS Motor Company Limited, Maruti Udyog Limited, Bajaj Auto Limited, and Tata Motors Limited.

India has a manufacturing advantage in the automobile sector. Big names like Ford Motor Company, General Motors, GE Corporation, Nissan-Renault, DiamlerChrysler, VW Group, Honda Motors, and Toyota Motors have set up their manufacturing units in India. Today India can boast of its quality resources which are given below:
  • Abundant capital goods
  • Brilliant engineering talent
  • Low overall cost
  • Political stability
  • Language strength of English
  • Legal and efficient accounting framework

. India is looking forward to developing its auto components industry and pharmaceutical industry which is becoming an influencing factor in the Automobile market. Foreign Direct Investment has already penetrated the market.

As such India is considered to be the 4th largest FDI destination in Asia. The automobiles industry is the most dynamic manufacturing sector of the country as well. Auto industry in India has grown in skills and lower prices. It can now cater to global markets with quality products.

Today, the Indian automobiles manufacturing industry has 11 passenger car manufacturers, 12 commercial and utility vehicle manufacturers, 10 two wheeler manufacturers, 12 tractor manufacturers, 3 three wheeler manufacturers, and 7 earth moving equipment manufacturers.

Today, approvals for FDI in Indian Automobile Market have become automatic and the country can export without paying taxes. Hence, a big opportunity for automobile FDI growth exists in India.