Good news! Passenger car loan down payment ratio is expected to be reduced!
On March 11, in the third "ministerial channel" centralized interview activity of the second session of the 14th National People's Congress, Li Yunze, director of the State Administration of Financial Regulation, said that the State Administration of Financial Supervision is studying reducing the down payment ratio of passenger car loans.
Immediately after March 13, the State Council issued the "Action Plan for Promoting Large-scale Equipment Renewal and Consumer Goods Trade-in", which mentioned that banking institutions are encouraged to appropriately reduce the down payment ratio of passenger car loans and reasonably determine the term and credit line of automobile loans under the premise of legal compliance and controllable risks.
The new regulations on the down-payment ratio of passenger car loans are about to be lowered, and the threshold for consumers to buy a car will be further lowered.
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A clear signal that the down payment could be lower
At present, more and more consumers are choosing to take out loans to buy cars.
One is active choice. Cars play an increasingly important role in life and directly affect the happiness index of people's lives. For consumers with insufficient funds on hand, loans become an important option for them to own a car quickly.
The other is a bit passive. Now when buying a car in a 4S store, many consumers find that buying a car in full is not popular, and the salesperson will strongly recommend a loan to buy a car, and even a loan to buy a car is more preferential than buying a car in full. The root cause is that nowadays, 4S stores sell cars with meager profits or even inverted profits, and the commission of car loan business has become an important source of profit for 4S stores, so sales staff also spare no effort to promote consumers to take out loans to buy cars.
Luo Jianfu, an automobile dealer in Wenshan, Yunnan, told the "China Automotive News" reporter that the phenomenon of buying a car with a loan is very common, and in his car sales stores, 70%~80% of users buy cars with loans. He said that he actually had the ability to buy a car in full, but found that the loan was 0 interest, so he decisively chose the loan method, and the funds on hand were used to invest and earn income.
At present, in the automobile market, the most common forms of car loans are mainly bank mortgage loans, loans from auto financial institutions and credit card installments. Under normal circumstances, the loan term of a new car mortgage loan is not more than 5 years, and the down payment ratio is not less than 20%. What is the reason for the sudden release of the signal of a reduction in the down payment ratio of car loans this year?
Liu Jian, founder of Auto Finance Research, believes that the purpose of this move is undoubtedly to further stimulate automobile consumption. There are two means to stimulate automobile consumption, one is taxation, and the other is finance. Previously, the mainland automobile consumption promotion was mainly based on tax measures to reduce or reduce the purchase tax, but this time it is mainly based on financial means to adjust the down payment ratio, term and amount of car loans. Although the means are different, the starting point is the same, which is to boost automobile consumption.
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Viewpoint 1: It may trigger a new round of car buying boom
Shen Jinjun, president of the China Automobile Dealers Association, commented that auto finance is a "booster" for automobile circulation. In the face of new market changes, on the one hand, auto finance provides fresh "blood" for the efficient operation of the automobile circulation supply chain, and ensures the healthy development of the automobile circulation industry through continuous and stable inventory financing and corporate financing, and on the other hand, it also provides sufficient "ammunition" for automobile consumption, and the penetration rate of auto consumer finance in the whole industry continues to rise, reaching 65% to 70%, gradually approaching the market level of auto finance in developed countries.
If the down payment ratio of car loans is further reduced, many people in the industry believe that it will bring a big wave of benefits to automobile consumption.
From the perspective of industry development, Liu Jian believes that specific rules and plans will be introduced in the future. At the beginning of this year, the State Administration of Financial Supervision and Administration issued the "Measures for the Supervision and Rating of Auto Finance Companies", which classifies and governs auto finance companies, and the reduction of the down payment ratio of auto loans is likely to loosen the restrictions on high-quality auto finance companies, which is conducive to the innovation and enrichment of financial products for these companies.
From the perspective of promoting consumption, Chen Wei, general manager of Cathay Pacific Souche (Tianjin) Financial Leasing Co., Ltd., believes that by reducing the threshold for buying cars and optimizing insurance costs, it can effectively stimulate consumers' enthusiasm for buying cars, promote the prosperity of the automobile market, and also drive the development of related industries and promote a virtuous economic cycle, which is of positive significance for improving consumption levels and promoting economic growth.
Reducing the down payment ratio for passenger car loans means that consumers can enter the car market with a lower threshold, which will greatly increase consumers' willingness to buy a car. Especially for those consumers who have always wanted to buy a car, but can't afford a down payment, it is undoubtedly a big benefit. With the lowering of the threshold for car purchase, it is expected that more consumers will choose to buy cars, which will directly promote the growth of car sales and is likely to trigger a round of car buying boom.
Judging from the practice of the front line of the market, Luo Jianfu also believes that reducing the down payment ratio of car loans can attract more groups to buy cars. For example, young couples or newlyweds who have just graduated from college do not have much savings in their hands, but they have a good job and strong repayment ability, and a low down payment plan can help them drive their favorite car as soon as possible. Another example is businessmen, although they have the ability to make a down payment, they are often willing to use the funds for other investment projects, and a low down payment is a more ideal way for them to buy a car.
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Viewpoint 2: It is difficult to have a qualitative change, so it is better to extend the loan term
It has almost become an industry consensus that lowering the down payment ratio has a positive effect on promoting consumption, but there are different views on how effective it is.
Wang Maoli, a veteran of auto finance, believes that reducing the down payment ratio of car loans will not improve the quality of consumption, and there are three reasons. First, before this, major commercial banks or auto finance companies have reduced the down payment of customers to buy cars in the name of various additional loans; second, the down payment is reduced, which is different from reducing interest, but the payment time is delayed, but the overall amount has not changed. Third, in the current consumption environment, the overdue proportion of car loans of various financial institutions is already very high, blindly reducing the down payment and customer access threshold, can expand the business volume, but will also increase the amount of non-performing assets, which is the time to test the risk control level of various financial institutions.
It is true that the "volume" of the automotive industry has extended to the auto finance chain, and through the operation of additional loans, products with low down payment abound in the market. Liu Jian explained that in 2017, the state issued the "Notice on Adjusting the Relevant Policies of Auto Loans", which used car add-ons as an option for financing, which is equivalent to lowering the down payment of passenger car loans in disguise. Therefore, compared with the international level, the down payment ratio of car loans in mainland China is not high.
"I think the down payment ratio will be reduced by up to 5%", in Liu Jian's view, the down payment of car loans is an important means of auto finance risk control, the lower the down payment means the lower the cost of committing crimes, which is easy to breed the risk of fraudulent loans. He bluntly said that although the national level has released a signal of a reduction in the down payment ratio of car loans, when it comes to the implementation level, some financial institutions may not dare to reduce it in view of the higher risk.
Luo Jianfu also has a deep feeling about the "volume" of auto finance products. He told the "China Automotive News" reporter that the down payment ratio, interest and threshold of car loans are getting lower and lower, and "zero down payment" and "zero interest" are no longer news. In order to compete for customers, financial institutions can even approve customers who have overdue records and have not been enforced by the court, and the potential risks cannot be ignored.
Liu Jian believes that compared with reducing the down payment of car loans, perhaps relaxing the requirements for the car loan cycle of licensed financial institutions will be more conducive to stimulating car consumption. The down payment for a car purchase is one thing, when the down payment for a car loan is generally not high, consumers are more concerned about the repayment pressure, if the monthly payment becomes low, consumers' enthusiasm for buying a car may be better released.
Text: Hao Wenli Editor: Huang Xia Layout: Wang Kun
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