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The Iran National Auto Loan was a short lived financial arrangement between the government of Hassan Rouhani Central Bank of the Islamic Republic of Iran, Iran Khodro, SAIPA and other Iranian car manufacturers who produced cars within the country.
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A list of 21 vehicles, had been released initially but that number quickly changed as other car makers joined in on the offer. The auto loan ceiling had been set at 250 million rials ($7120 at market exchange rate) with an interest rate of between 16-18%. The payback period is a maximum seven years or 84 installments.
On November 15, 2015, The Central Bank of Iran sent a notice to automakers and dealers, asking them to watch for the limited number of car loans available. In a letter to the Ministry of Industries, Mine and Trade posted on its website on Saturday, the CBI reminded auto industry officials that the total amount set for auto loan scheme can cover no more than 110,000 vehicles. By the end of the day the loan ceiling had been reached making it the fast rise in sales in any car industries history.
The loan is notable as it was the first and only financial offering by the Rouhani administration to offer a long term fixed-interest loan to the majority of car buyers. It is also notable that within the space of four days 110,000 car buyers put their name down for the item.[1]
The announcement indicates that starting Monday November 9, buyers of Iranian-produced cars will be eligible for a loan of up to 80 percent of the purchase price.[2]
Prior to the short term loan, vehicle production in Iran declined by 12.2% in the first seven months of the Iranian fiscal year (ended October 22) compared with the same period of last year.[3] A total of 284,472 passenger and heavy-duty vehicles were produced during the period. Statistics released by the Ministry of Industries, Mining and Trade show that during the seven months, vehicle production has declined at the country’s top two vehicle manufacturing companies, Iran Khodro Co. and SAIPA, by 14.4% and 13.4% respectively, Eghtesad News wrote.[1]
After the abrupt end of the designated 6-month period, which happened under 7 days many would be car buyers were shocked to discover the entire loan amount ended so quickly. However, the government stated that auto loans would become part of a wider pack of financial policies over the course of the administration.[4]
One writer covering the issue for the Financial Tribune noted at the time;
When the loan came to a screeching halt incredibly early, everybody was taken by surprise, including the government officials. It remains unlikely whether the government will allow for continuing the scheme in the same vein as untapped demand far outweighs supply.[5]
Iran's head of the Department of Environment, Massoumeh Ebtekar following the end of the loan period noted; “Given the current financial state of automakers, offering the loan was a sensible thing to do,”[6]
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