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Economichna Pravda June 2021
About 85 thousand of new cars are registered in Ukraine every year, and the share of car selling on credit has even increased against the past year and represents about 40%. In April, one of the most active market player – Credit Agricole – set a record and issued car loans for the amount of UAH 315 million. This is the best result for 10 years of the bank’s leadership in the car loan market.
Roman Bunich, the Head of Long and Alternative Channels Department of Credit Agricole, told us how such record indicator had been achieved, which car models are preferred by the Ukrainians, and how the market will develop in the future.
— Why is the car lending market growing despite the crisis?
— You are right, the lockdown has hardly affected the demand: same as before, the customers buy new cars on credit very actively. On the one hand, the market is driven by the developing credit culture and active position of the Ukrainians, on the other hand – by decrease of rates, which makes car loans more affordable. The market grows organically in response to clients’ needs; the loans are used more frequently, and we welcome such trend.
In 2019, the share of cars sold on credit was about 25%. Today, the market average level is 40%. For some car makes, this level can reach 50% since the popularity of a car make is important.
Now I can see how the market is developing, new players are entering it and starting lending. Some time ago, for example, there were 3 market players, while now there are 10. If the growth of pricing, qualitative and process competition is unabated, we will be able to reach the share of cars sold on credit at the level of 50-60% by results of 2021.
However, let me note that there is no accurate official statistics of car loans in Ukraine. We are guided by the so-called “summary table” based on the information from various market players: banks and insurance companies.
— Why only few banks deal with car lending?
—There may be different reasons for different market players. To be successful in the car loan market, one needs to have a long-term expertise, well-established decision-making center, and a professional team. The quality of procedures requires ongoing improvement. We do it every day and, as a result, issue 30-50 loans per day. Moreover, we are the only bank in the Ukrainian market to hold the ISO 9001 certificate in car lending.
Credit Agricole is the exclusive financial partner of the "Car of the Year in Ukraine" campaign
To be appreciated by the clients, the bank should respond to their needs comprehensively, and not just grant car loans. For example, in Credit Agricole, we offer insurance products of partners of the bank and a credit card "DriveCard" that expands financial resources of the client.
Each bank has its own strategy, and not each of them wants to be in car lending. However, the number of market players grows, and this moves the industry forward.
— Last April was a record month for Credit Agricole. Your car loan production reached UAH 315 million. How did you manage to achieve this level and when do you plan to beat it?
This was a result of a long-term effort: we implemented a number of changes that were prepared in advance. They were about decision-making speed, the required set of documents, possibility to finance CASCO. We updated the product without income statement and with 50% deposit, and revised and simplified internal rules of loan application approval.
The above factors enhanced by favorable market conditions helped us improve our car lending indicators. Thus, in April we set a record having signed 660 loan agreements for the total amount of UAH 315 million. For reference, our previous record was registered in December 2019: UAH 310 million.
Thanks to the successful start of the year, we reached the level of UAH 1 billion of car loans in the middle of May. It is worth noting that the bank achieved the same result during two successive pre-crisis years.
It is difficult to make forecasts as the situation is changing quickly. However, according to the retrospective analysis, the market is normally not very active in summer. We expect a new stage of market agitation in the autumn. This is when we intend to update our record.
— Which car lending indicators make you feel proud?
Appreciation and confidence in Credit Agricole brand. There are customers who have already received six loans each. About 7% of clients come back to us; about 14% of them received loans three and more times. This means that customers are happy with both our product and our service, which is the most important. People know our programs and recommend them to their friends and colleagues.
Our work is highly recognized by market experts as well. Thus, Credit Agricole has been the leader of the “Car Loan” nomination of the annual rating “50 Leading Ukrainian Banks” for six successive years.
Credit Agricole is the first in car loans for the sixth year in a row
— What cars are bought on credit most frequently?
— Hatchbacks up to UAH 500,000 and crossovers about UAH 500-700 thousand are bought on credit most often. It is difficult to specify a brand as all car distributors support their lending programs actively. The most popular models include: Renault Sandero, Duster and Logan; Toyota RAV4 and Camry; Nissan Qashqai and X-Trail; Peugeot 2008 and 308; Mazda-6 and CX-5.
Credit Agricole is not promoting a particular brand; we are guided by the needs and wishes of our clients.
— In one of your interviews you mentioned that it is not a brand but a loan that sells a car. Please give an example.
Imagine that a potential buyer visits a multi-brand car dealer and chooses between two options. The first car costs UAH 600 thousand, and thanks to a lending program the buyer can get a UAH 30 thousand discount. The second car costs UAH 6000 thousand but there is no credit option. Price is an important market driver, and the discount of UAH 30 thousand may seriously influence the decision of the buyer.
Another example: a client comes to the dealer with UAH 600 thousand, but the dream car costs more. A loan is a solution.
Some sellers are ready to offer a discount is the client buys a car of a higher class than he or she initially intended. Thus, it is better to get a loan and buy a better car.
— What do I need to buy a car?
Credit Agricole offers a wide range of car lending programs. For clients with a minimal budget, we propose a car loan with only 10% prepayment of the car price. The list of documents is rather standard: passport, ID code, income statement and a document confirming sources of income. Usually, it takes a manager 2-3 hours to make a decision.
One of the key advantages of Credit Agricole car lending programs is the widest possible choice. We have exclusive lending conditions with more than 15 leading car manufacturers such as Renault, Citroen, Peugeot, Toyota, Nissan, Opel, Mazda, Suzuki, BMW, and others. We do not insist on notarization of collateral agreements, and we allow early repayment of loans without a fee, and offer loans for CASCO.
And what is more, a car loan by Credit Agricole is an assurance of service quality with no hidden fees or other unexpected charges.
Credit Agricole plants trees on behalf of clients as part of the annual eco-Initiative “Tree for Credit“
— What would you recommend a buyer to note while choosing a lending program?
—Clients became more conscious and financially competent; they consider a loan as an efficient financial solution. They understand that a loan is a tool that allows them to make their car dreams true today.
On the other hand, a loan means responsibility. I would recommend paying attention to lending terms, terms and conditions of the loan agreement, and additional expenses: notarization, insurance, etc.
Take your time and do not follow someone’s recommendations blindly, study the market and compare the lending terms. Bank managers, information on bank websites, in particular, online calculators will help you do it. In 80% of cases, credit consultants support car purchase at showrooms and they will give you advice.
And to sum up, my personal advice: if you need a car, welcome to Credit Agricole!