26% of Latvian residents plan to buy a newer, more suitable or even their first car within the next year, and the interest is especially high among young people. Between the ages of 18 and 29, a third of all people surveyed by the market research agency Norstat Latvija plan to own a personal vehicle.
Despite high inflation and relatively expensive fuel, a quarter of households are actively considering changing or buying a car. Another 14% would like it, but believe that the financing costs are currently too high, because, for example, the EURIBOR rate is applied to car leasing, which currently makes the loan very expensive. This does not deter others, however, and a tenth of all respondents plan to choose leasing as a way of financing the purchase of a car.
7% have decided to pay for the purchase from their personal savings, while 6% will choose a car loan because the EURIBOR rate is not applied to it and therefore the monthly payment will not change during the term of the contract. Another 3% plan to borrow money from relatives.
Also, the most requested financing in the youth group is leasing, which will be chosen by 12%, while 10% have decided to prefer a car loan. The proportion of respondents who plan to use only their own money is relatively high – 8%. Some of these people could be successful young professionals who already have an average to high income, but don’t yet have a lot of debt or other expenses. This assumption is strengthened by the fact that households with only two people – both adults – will most likely use their own savings.
“The personal car is still an important part of the household, so people are ready to allocate funds for the purchase of a better or more suitable vehicle for the relevant period of life. Moreover, interest in them is growing. In the third quarter of this year, the total Bigbank the total loan amount issued to customers for the purchase of a car is 27% higher than in the corresponding period in 2022. The average purchase amount has also increased – from 6,518 to 7,213 euros. At the moment, buyers in the market also have a wide range of financing options, as car loan and car leasing rates have actually equalized. In addition, the monthly payment of the car loan does not change during the entire period, since the EURIBOR rate is not attached to it. This weighs part of the buyers in favor of this type of financing,” states the trends Bigbank Latvian branch manager Edgar Surgoft.
Norstat Latvija the study was conducted at the beginning of October, surveying 410 Latvian residents.
At Bigbank
Bigbank AS is an Estonian bank that has expanded operations outside of Estonia, establishing branches in Finland, Sweden, Latvia, Lithuania, Bulgaria, as well as offering cross-border services in Austria, Germany and the Netherlands. The company is managed by Martins Lants, a member of the board of the group. Mart Veskimagi, Argo Kiltsman, Ken Kanarik and Ingo Poder also serve on the board.
Bigbank
2023-10-16 09:17:12
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