It's been quite a few months that a vital factor like easy financing has been on the side of the domestic auto majors and hence several auto companies have been able to file record sales numbers month after month, but perhaps the advantage is slowly fading away.

Following the 25 basis points hike in repo and reverse repo rates by the Reserve Bank of India (RBI), interest rates on auto loans is set to go up 25-50 basis points from next week.

In a country where close to 70% of the total cars are financed before they make their way out of the showrooms, experts are of a view that the buyers will now have to shell out an additional Rs 100 as EMI on an Rs 4,00,000 loan for a period of 36 months.

It is to be mentioned here after it is made public by various banking companies; it will be second hike in interest rates in the current financial year as far as the auto loans are concerned.

Notably, the banking industry had hiked rates by 25 basis points around the period of April this year. The existing rate of interest on automobiles varies between 9.5 per cent and 12.5 per cent depending on the bank.

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