Banks To Offer 10% Car Loans … Aganga

The Federal Government is set to launch a car financing scheme involving both local and international banks by November, 2014
This, according to Dr. Olusegun Aganga, Minister of Industry, Trade and Investment, will effectively put an end to the cash-and-carry mentality, while ensuring that many enjoy financing support in their desire to acquire new cars at cheaper cost.
The Minister said the import duties for cars remain 35 per cent and no more.

The Federal Government is set to launch a car financing scheme involving both local and international banks by November, 2014
This, according to Dr. Olusegun Aganga, Minister of Industry, Trade and Investment, will effectively put an end to the cash-and-carry mentality, while ensuring that many enjoy financing support in their desire to acquire new cars at cheaper cost.
The Minister said the import duties for cars remain 35 per cent and no more.
Addressing newsmen on Thursday last week  in Lagos on progress made in the government’s automotive policy, Aganga said the ongoing discussions involves ensuring that Nigerians get such loans at the rate of about 10 per cent, thereby reducing the cost significantly, over a four-year term.
“The Federal Government is not creating a pool of funds, but encouraging banks to buy-in, and we are working with them to reduce the interest rate and they have agreed. Government has brought the rate down close to about 10 per cent. The pool of funds can be as big as (the banks) want it, based on commercial consideration,” he added.
Making clarifications, he said just as in the sugar industry, backward integration is ongoing in the automobile industry, following which global car manufacturing brands like Nissan, Peugeot Leyland, among others, have already started local assembly of their various brands.
He said, whereas the real duty is 35 per cent for those who have set up plants and are engaged in production in the country, auto dealers who have not invested in backward integration by acquiring land, and setting up their plants for manufacturing would be charged 70 per cent for importing new vehicles. The used vehicles, he explained, would remain at the rate of 35 per cent.
Aganga said the 14 vehicle assembly plant owners, under the new policy and to help meet the supply and demand gap in the meantime, would continue import new cars at 35 per cent. They would however pay zero duty when importing Completely Knocked Down (CKD) parts; while the first type of Semi-CKD is to attract five per cent duty; and the second grade- 10 per cent.
He said this brings the blended rate for the new, CDK and both classes of Semi-CKDs to about 20 per cent.