According to statistics by the company Mokilizingas, for the first six months of this year the average loan for hire purchase cars grew by almost 5% when compared with last year - from 2631 EUR to 2748 EUR. Usually car loans are taken out by men 18 - 30 years of age, who are living in cities, a press release from the company states.
The car fleet is getting younger and more expensive
© Shutterstock

"We note that this is not the amount for which a car is purchased. This is the amount of the car loan, therefore the value of the hire purchase of the car is higher - people usually pay part of the price without a loan," says Marijus Kėbla, Sales Project Manager of Mokilizingas.

Car dealers also note that more is being spent on purchased cars. "I think people are beginning to calculate and see that if you buy a car which is older than 10 years, you will spend more on its repairs per month than the cost of a loan to buy a newer car. And the comfort is not comparable. After all, newer cars are safer and provide more driving pleasure, and customers usually visit the car repair shops only for current maintenance", says Kristina Pavliukianec, executive director of Premium Car, the company that sells used cars.

Aivars Ornatavičius, director of Premium Auto PJSC, engaged in the import and export of cars, points out that currently new cars have also become more expensive, therefore people must also spend more when buying a used one as well. "People are buying newer cars. However, the average car price, which is growing the fastest, is influenced by the growing prices of new cars. If the model of the new generation used to be 2 to 5% more expensive than its predecessor before, now this difference in price reaches from 5 to 10%. Accordingly, a car fleet several years old becomes more expensive as well", says A. Ornatavičius.

K. Pavliukianec believes that the increase of the car fleet price also depends on trends in the choice of car models, especially the growing car fleet of hybrid and electric cars. "Of course, we are still far from Ukraine, where, after the repealing of taxes on electric cars, the vehicles of this category have simply flooded the market. However, hybrid cars, same as in all of Europe, are becoming more and more popular. Just look at how many Toyota Prius cars are driving on the streets of the capital. But they are more expensive when compared with conventional cars", says the manager of Premium Car.

According to the results of Mokilizingas for the first six months of 2018, cars with a loan are mostly purchased by men, who during six months received a significant share of 62% of car loans. Also, statistically, men apply for bigger loans - on average 2886 EUR versus 2542 EUR for women.

The biggest car loans, reaching 3227 EUR on average, are usually requested by men 18 - 30 years of age. "This customer group of Mokilizingas most actively buys cars, and their loan agreements account for almost 30% of all agreements for vehicles concluded during this year", says M. Kėbla.

Following closely behind, based on the size of the loan agreements, are women 40 - 50 years of age, with an average borrowed amount of EUR 3155 for the purchase of a car.

When classifying the buyers according to the place of residence, city residents are clearly leading. During the first six months of 2018, they received a noticeable share of 64% of all car loans. However, according to the number of agreements in rural areas that are lagging behind, the average amount of the loan exceeds the amounts received by urban residents; the average borrowed amount in the city is 2646 EUR, while in the rural areas it is 2994 EUR.

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