Zero down still exists
22/3/2004 15:51
The zero down-payment policy for getting car loans is still available
in Shanghai, despite recent moves jointly taken by the local banks, the Labor
Post reported today.
On March 8, local banks uniformly raised the amount of
the down payment required for car loans to 20 percent of the net car prices
(excluding license plate charges, premiums and purchase taxes), with the zero
down-payment option being withdrawn from the market.
According to the new
move, local car buyers are able to get loans for up to five years for no more
than 80 percent of the net car price when purchasing normal five-person sedans;
those purchasing seven-plus seat business and mechanical engineering vehicles
can get loans to a maximum of 70 percent for no more than three
years.
However, in order to attract car purchasers and gain more market
shares, some local dealers are finding detours around the regulations. One
method is to falsely raise the car price to help a buyer get a loan of up to 100
percent of the car price.
Offering zero down payment has large risks, said
an industry analyst. Currently, car dealers will guarantee buyers?loans from
banks, but if the dealers have problems in their businesses, it will be risky
for the bank, the analyst pointed out.
Wendy Zhang/ Shanghai Daily news
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