Carmakers offer teaser loans to attract customers as demand remains weak

Carmakers Maruti Suzuki, Hyundai and Mercedes Benz are offering buyers "teaser loans", a move sources said followed a softening of the Indian central bank's stance on the products in the face of a coronavirus crisis induced economic slump.

Although the Reserve Bank of India (RBI) never banned teaser loans, which offer low interest rates for a limited period before rapidly rising, its obvious disapproval had kept banks from offering them in the past, bankers said.

Maruti Suzuki, Hyundai and Daimler's Mercedes Benz have all teamed up with banks to offer purchase schemes involving teaser deals, recent press releases show.