Favorable loan conditions push car sales up in China image

Autumn is often considered a golden season for car sales in China. And sales this year have got an extra boost from policies making it easier for buyers to pay off loans for cars.

Liu Junli in Beijing wants to buy a car. Looking at what money he had, he’d originally planned to go ahead with the purchase next year.

But favorable loan policies offered by car dealers over the National Day Holiday have made him change his mind.

Liu Junli, Car buyer, said, “I would have needed a lot of money if I wanted to pay off everything at one shot. But the conditions of this loan mean I can keep some money by to do something else with. And I’m also okay with the term of the loan.”

According to the car dealer, the model picked by Liu comes with a zero-interest loan.

Putting it simply, customers only need to come up with a down payment, before paying back part of the principal each month, with no added interest.

Jiao Miao, Sales Manager, Guangzhou Toyota Motor Co. ltd, said, “Before this policy, 8 to 10 percent of consumers chose to take out loans to buy cars. But now the proportion is more than one third.”

In Anhui Province, a car maker started a joint financing company this April, working together to extend loans to buyers. And sales have surged.

Hao Qianglin, Manager of Wuhu Anqi Auto Sales Co., said, “When we cooperated with banks, the volume of autos paid for by loans accounted for only 3 percent of our total sales. But that same figure has climbed to 8 percent.”

Clearly, favorable policies in terms of down payments, interest rates, commission charges and the like are proving very popular with those eager to buy their own cars.