The National Automobile Union (NAU) approached Deputy Prime Minister Denis Manturov with a request to cap the commission charged to car dealers when cars are sold on credit. A report from Izvestia, citing the relevant letter, outlines this appeal and the concerns behind it. The request centers on consumer loans for vehicles and the friction that dealer practices can create in the market, especially when financed purchases become a common route for buyers in Russia and in similar economies where credit terms shape affordability and demand.
The objection emphasizes that a large portion of car purchases are funded through credit and that these vehicles are growing more expensive. It argues that the rise in Central Bank interest rates is not the sole driver of price increases. In practice, some dealers impose loan processing commissions of up to 9% of the loan amount. Beyond the base loan, the cost of financing is frequently embedded with the price of additional products and services, such as insurance offerings, extended warranties, and optional equipment. This layering can inflate the true cost of ownership for a new vehicle and blur the line between the core loan and ancillary add-ons, complicating the decision for buyers and potentially reducing transparency in the lending process.
One of the union’s proposals is to restrict dealers from installing any accessories on a vehicle prior to sale. The aim here is to prevent pre-sale markups that inflate the final price and to ensure that buyers clearly understand what is included in the vehicle’s cost. In addition, the NAU suggested limiting the profits tied to credit provision and insurance products. Specifically, they recommended establishing a maximum commission cap for car loans charged by dealers, not exceeding 4%. This limit would help align dealer incentives with genuine customer value rather than promoting optional products that may not be essential for every buyer.
The union also called for penalties related to pricing and product terms to be enforced. A clear framework for regulating penalties would promote fairness in the sale of vehicles and associated services, ensuring that customers are not subjected to hidden charges or misleading terms. By focusing on transparent rates and fair practices, the proposal seeks to restore balance in the market and protect consumer interests amid a landscape of evolving financing options and product bundles.
Prior to these discussions, a representative from the Ministry of Industry and Trade commented on the broader outlook for the Russian automobile market. The ministry projected a gradual recovery, with a potential sales level reaching about 1.3 million units in 2024. It also noted that 2026 could see sales aligning with the average annual level achieved between 2015 and 2021. The ministry anticipated steady growth of roughly 1% per year from 2027 onward, suggesting that by 2030 the market could approach 1.8 million cars annually, and by 2035, sales might reach around 1.9 million vehicles per year. This forecast reflects a cautious but optimistic view of sector momentum in the years ahead, contingent on macroeconomic conditions, lending availability, and consumer confidence supporting vehicle purchases.
Earlier reports on ROAD had indicated that Russia was expected to sell about 950,000 new passenger cars in 2023. This figure served as a benchmark for evaluating market momentum and the impact of financing practices on actual demand. Stakeholders, policymakers, and industry observers have continued to monitor how credit terms, dealer incentives, and regulatory measures will shape affordability and access to new vehicles in the coming years, both within Russia and in comparable markets around the world where consumer credit plays a pivotal role in vehicle ownership.