• Sat. Sep 23rd, 2023

Finance companies are permitted to lend up to 80% of the value in used motor vehicle purchases

The Central Bank (CB) decided to increase the loan to value ratio (LTV) of licensed finance companies up to 80 percent on auto loans in purchasing used passenger vehicles in the secondary market.

Issuing a direction to licensed finance companies, the CB informed the companies that the LTV ratio on automobile loans for registered vehicles that have been used in Sri Lanka for over one year after the first registration is now increased 80 percent from earlier imposed 70 percent cap.

However, the LTV ratio on loans for purchasing unregistered and registered motorcars, SUVs, and Vans that have been used in Sri Lankan for less than one-year prevails at 50 percent including hybrid passenger vehicles and locally assembled passenger vehicles at 70 percent.

The LTV ratio for electric vehicles (imported and locally assembled)remains at 90 percent.

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