Car down payments drop
27/2/2003 15:28
Car down payments have dropped to five percent, but buyers must have at
least associate degrees and have their personal assets and salaries certified,
the Shanghai Morning Post reported today.
Restrictions on initial car
payments will be gradually lifted and competition will greatly increase in the
car credit market, said an industry analyst. Banks and car agencies will offer
more beneficial down payments, interest rates and terms of credit to attract
consumers, the analyst said.
Last week a car agency was advertising a
five percent down payment. The agency is able to offer such attractive terms
because they extend the credit themselves, said a spokesman.
"Because we
remit 30 percent of the loans as a guarantee to the bank, we aren't breaking the
rule set by the central bank that down payments for car loans cannot be lower
than 20 percent of the total price," the spokesman said.
The requirement
for an associates degree and certification of assets and income is a bid to
reduce bad debt rate and prevent risks, the spokesman said.
"We collect
600 yuan in commission on each deal, and our business will grow if we can
maintain a low rate of bad debt," he said.
Credit is not being extended
for imported cars, he added.
Wendy Zhang/ Shanghai Daily news
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