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Azerbaijani consumers prefer to buy car on credit - expert

Economy Materials 23 November 2020 17:18 (UTC +04:00)
Azerbaijani consumers prefer to buy car on credit - expert

BAKU, Azerbaijan, Nov. 23

By Sadraddin Aghjayev - Trend:

Azerbaijan made various decisions several years ago to modernize the vehicle fleet in the country, however, the project has remained on hold, Eldaniz Jafarov, a public relations specialist at Toyota Center Baku, said in an interview with Trend.

According to Jafarov, in 2019, Azerbaijan adopted the ‘State Road Safety Program’, which was signed by President Ilham Aliyev and sent to the Cabinet of Ministers for further implementation within five years.

"Since the program’s adoption, no progress has been recorded within the above project despite on its envisioning a reduction in customs duties, excise taxes, incentives for the import of electric cars, and other provisions," he said.

The specialist pointed out that everyone who contacts the Toyota Center is primarily interested in buying a car on credit.

"Since the interest rate on loans in Azerbaijan is very high, not every client succeeds in buying a car. On average, the cost of a car is $25,000, and the buyer must make the first installment of at least $12,000 dollars, while the remaining amount must be paid at a 16 percent lending rate, making the car even more expensive," he said.

He proposed to conduct import and sales of a car by following steps:

· reduction of customs and excise taxes on the import of new environmentally-friendly vehicles;

· simplification of car loan conditions and reduction of the amount of CASCO registration;

· development of a program for old car utilization.

As Jafarov noted, since the above conditions aren’t offered by the state, the Azerbaijani population has to purchase cars from the secondary market. Therefore, the main sales market for cars is government agencies, state and private companies, as well as individuals.

"One more problem exists in this direction: the banks don’t always approve loans to potential clients. Moreover, they impose on the clients a comprehensive motor (CASCO) insurance policy, which adds to the cost of the car," he added.

The specialist also noted that foreign countries practice buying a car on a lease, however in Azerbaijan, this method isn’t widely practiced, and many citizens beware of the method due to the increased cases of fraud in leasing transactions.

Touching upon the impact of the COVID-19 pandemic on car sales, he stressed that despite on drop they still continue.

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