The sale of private cars witnessed a significant rise over the last few years, thanks to easy access to automobile loans with low interests.
A total of 20,304 new cars have been registered with Bangladesh Road Transport Authority (BRTA) in 2016 that means over 55 cars hit the streets every day, according to the latest official data.
BRTA said 21,062 new cars got registration in 2015 while 14,699 in 2014.
"We've had already given registration to 16,160 cars in the first eight months (January-August) in 2017," a BRTA official told BSS.
The number of total private passenger cars in the country is 3,24,701 and that of these cars, 2,55,622 are in Dhaka metropolitan area, according to the data of BRTA updated in August 2017.
"People, especially the mid-ranking office executives, can take car loans easily from banks. So, they are purchasing cars to make their journey hassle-free," said the BRTA official.
Responding to the question why the number of cars taking registration in Dhaka is higher compared to the other cities, another BRTA official said many car owners from other areas of the country take registration from Dhaka to get high price at the time of resale.
"We are offering auto loans with lucrative interest rates. The loans are processed quickly for both new and reconditioned cars," said Additional Managing Director and Chief Operating Officer of Mutual Trust Bank (MTB) M Hashem Chowdhury.
He said MTB is offering car loans at 10 to 11 percent interest only with flexible repayment for 12 to 60 months and there is no hidden charge with the loan. "If anyone earns minimum Taka 30,000 per month, he or she is eligible to get the loan," he added.
An official of Islami Bank Bangladesh Limited (IBBL) said the number of car loan borrowers is increasing as the bank has given loans to 233 clients till July 2017 which was 184 in 2016 and 128 in 2015.
He said IBBL has a "Car Investment Scheme (CIS)" since 1995 to help a section of public-private officials, businesspeople, teachers, house owners, professionals, existing clients of IBBL and wage earners buy private cars.
According to Bangladesh Bank's instruction, he said, IBBL is providing loans for a maximum four-year period for recondition cars and a maximum five-year period for brand new cars with only 12.50 percent profit, which was about 16 percent earlier.
"We are providing 50 percent of the total price of a car, but the amount will not exceed Taka 40 lakh," he added.
The recovery rate of car loan is also good, he said, adding that in July 2017 the recovery rate was 94 percent which was also 94 percent in 2016 and 93 percent in 2015.
In July 2017, the IBBL senior official said, the outstanding amount of the scheme was Taka 20.98 crore, which was Taka 17.30 crore in 2016 and Taka 10.20 crore in 2015.
M Mahbubur Rahman, proprietor of MM Trading, said about 80 percent of their customers are purchasing cars with bank credit as the process of taking loan is quite easier now than before.
"We sold about 70 to 75 cars till October this year. We have all types of customers including bankers, businessmen and multinational companies," he added.