Impact of Changes in Interest Rates on Car Loan and Sales of Car in Delhi

Author(s)	Mr Jayant Bajaj
Country	India
Abstract	The present study examines the relationship between car loan interest rates and passenger car sales in Delhi over the last two decades. With the increasing dependence on credit financing, automobile purchases in urban markets have become highly sensitive to changes in borrowing costs. This research aims to analyse how fluctuations in interest rates influence consumer demand for cars, using secondary data and statistical tools such as trend analysis and simple linear regression. The study is based on a 20-year dataset comprising average car loan interest rates and estimated car sales figures in Delhi. The regression model is used to establish the relationship between the independent variable (interest rate) and the dependent variable (car sales). The results reveal a strong inverse relationship between the two variables, indicating that an increase in interest rates leads to a decline in car sales. The derived regression equation shows that a 1% rise in interest rates results in a significant reduction in car sales, reflecting high sensitivity of consumers towards EMI-based affordability.
Keywords	Interest rate , car sales , loan changes
Published In	Volume 8, Issue 3, May-June 2026
Published On	2026-05-07
DOI	https://doi.org/10.36948/ijfmr.2026.v08i03.77291

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