Auto Loan Interest Rates in Russia: A Current Analysis
Car loan approvals have dipped to a 17% rate.
Latest reports indicate that the average interest rate for loans on new cars in Russia has plummeted to a record low of 17% per annum as of April 2025, marking the lowest figure since October 2023 [1][2]. However, the overall auto loan interest rates continue to loom large, reaching up to a staggering 30%-40% per annum - a heavy financial burden for consumers [4].
Trends Over the Past Year
The auto loan interest rates have witnessed considerable volatility over the past year. Before the current descent, interest rates were predominantly high due to economic strains and tightening monetary policies. The Bank of Russia's benchmark interest rate, which sets the pace for overall borrowing costs, peaked at a whopping 21% in October 2024 and remains unmoved until April 2025 [3][5]. In spite of this persisting high benchmark rate, new car loan rates have shown a decline, potentially indicating market adjustments aimed at stimulating demand.
Economic Factors at Play
Russia's economic woes, such as high inflation and international sanctions, have significantly contributed to the exorbitant consumer loan interest rates. The central bank intends to bring inflation down to a range of 7.0–8.0% in 2025 and a more modest 4.0% by 2026 [3][5]. The reduction in new car loan interest rates to 17% could be an attempt to strike a balance between economic growth and controlling inflationary pressures.
The Used Car Landscape
Detailed reports on interest rates for used cars are scarce. Generally, the interest rates on used car loans tend to be greater compared to their new counterparts due to the additional risks associated with older vehicles. The high interest rates for automotive loans - up to 30%-40% - seemingly apply to both new and used car purchases [4].
In conclusion, while the interest rates on new car loans have taken a downturn, the broader automotive loan market continues to pose challenges due to high borrowing costs that are a direct result of Russia's economic struggles.
[1] Source: ODKB data[2] Source: "AutoStat Info"[3] Source: Bank of Russia[4] Source: Finance Experts' analysis[5] Source: Government of Russia Economic Policy statements
- Despite the declining interest rates for new car loans in Russia, the high borrowing costs in the broader automotive loan industry, reaching up to 30%-40% per annum, remain a significant financial burden for consumers, affecting both new and used car purchases.
- The high interest rates for automotive loans in Russia could be influenced by economic factors such as high inflation and international sanctions, which have significantly contributed to the elevated consumer loan interest rates across industries, including finance and transportation.
