Since the popularization of credit system and Chinese people’s consumption level have been raised to a higher standard, the personal loans for consumptive cars have gained a large growth. It is predicted that the general volume of Chinese auto finance market will approach 670 billion CNY. But the permeability of domestic auto finance couldn’t exceed 20%, falling far behind than developed countries, which indicating the big potential of China’s auto finance market.
Currently, one, who intends to obtain automotive loans, can apply for mainly three loans, including bank loans, credit card installment payment and auto financing company loans. And commercial bank loans stands out among others because its low cost and large scale. And it still remains the main force of auto finance.
However, most 4S shops would recommend their independent auto finance company loans, other than commercial bank loans. According to Zhang Xueyong, vice president ofSchool of Finance in Beijing-based Central University of Finance and Economics, auto finance companies, which specialize in loans for one car series of a single car brand, are able to provide more professional service than other loans providers. And their close relationship with auto factories helps them to put forward the upgrading of auto consumption.
Mr. Zhang added that it is a future megatrend that auto finance integrates with the Internet. Through Internet, auto finance providers can improve their service quality, expand the customers and increase efficiency. For example, auto finance borrowers can raise money to purchase cars via Internet with the new car as security for money, rather than real property as for traditional bank loans. It has a basically same rate of interest of banks and it can be finished with 24 hours.