The overall rate over certain important factors that are the need of the people and help in the development of the country are fixed by the Reserve Bank of India. While the rate of interest for the other sort of financing activities for the wants of the customer is fixed by the bank itself but it is regulated by RBI.
However, these rates cannot exceed a limit as stated by a reserve bank of India. They are highly regulated by the reserve bank and thereby always in control. However, the choice of the rate of interest stays with the bank.
The average of the current rate on interest on automobiles that almost all the banks follow whether they are private or public sector are around 8% per annum. The financing rate keeps changing and the rules for providing finance keeps changing whenever a bill is passed relating to this. Therefore interest on loans provided for cars are therefore not to be generalized as different bank as different rates of interest though not with much variance. They are still different in the quality of the service they provide. They also differ in the way they treat you especially when you are a defaulter. Sometimes they tend to seize the vehicle and therefore they are regarded as high disrespect. Therefore, the automobile financing rate is always a bit higher than the other finances as they are not a need if the day but they are the wants of the individual customers,
As the general mythology behind this is people who opt for cars are the not the ones who strive hard for survival. They belong to that clan who belong to the higher strata of the society. However when it comes to two wheelers the case is not the same but still they are considered above poverty line. However, many aspects go into fixing the rate of interest for an automobile. These aspects mainly are relates to the various economical aspects of the country.
Therefore the automobile financing rate currently hangs somewhere between 8% as of today and it also depends upon the number of years of payback, which determines the EMI and fluctuates if it is under the fluctuating scheme of calculating the rate interest.