There are currently four common car purchase loan channels: first, traditional car loans from banks; second, credit card installment car purchase services mainly promoted by commercial banks; third, loans through brand-owned auto finance companies; third, The fourth is to apply for a car loan through the emerging Internet P2P financial platform.

Bank’s traditional car loan

Bank’s traditional car loan business is a direct-to-customer loan. Consumers can go directly to the bank to apply for a car loan without going through a dealer. However, with the tightening of bank credit, traditional car loan business has gradually decreased. At present, many banks have basically suspended car loan business for individuals. Taking ICBC as an example, the price of the 5-seat new Santa Fe 2.4L automatic four-wheel drive smart naked car is 249,800 yuan. The consumer has a down payment of 30%, which is 74,940 yuan, and the two-year bank loan benchmark interest rate is 6.65%. Therefore, consumers The monthly payment is 7,801 yuan (24 months).

Advantages: low loan interest rates

Bank traditional car loans basically cover mainstream brands and models, and their interest rates are the People’s Bank of China benchmark interest rate (bank loan benchmark interest rate: 1-year 6.56%; 2 6.65% for one-year term; 6.65% for 3-year term; 6.90% for 4-year term; 6.90% for 5-year term), which are lower than the interest rates through other channels. In addition, its repayment options are flexible.

Disadvantages: High threshold, cumbersome procedures, long loan time

Applying for a traditional car loan from a bank has high threshold and difficulty. Consumers need to provide the bank with a series of supporting documents: ID card, work certificate, bank statements for the past year, social security certificate for more than two years (inclusive), real estate certificate or house sales contract or house purchase invoice, etc.; a third-party guarantee is also required and collateral.

Commercial bank credit card installment plan

Compared with traditional car loan business, offline banks are more inclined to recommend credit card installment car purchase business to consumers. That is, after the consumer has paid the down payment for the car, he or she applies to the bank to use a credit card to purchase a car at a cooperative dealer. Consumers make regular monthly repayments and pay a certain handling fee. Taking China Merchants Bank as an example, the standard handling rates for China Merchants Bank's automobile installment business are 5.5% for 12 installments, 10.5% for 24 installments, and 14.5% for 36 installments. Therefore, consumers purchase the 5-seat new Santa Fe 2.4L automatic four-wheel drive smart naked car in 24 installments, with a total handling fee of 26,229 yuan, and an initial repayment amount of 36,637.33 yuan (the handling fee is paid in one lump sum in the first month). The monthly payment is 10,408.33 yuan.

Advantages: Low application threshold, convenient repayment

The approval procedures for credit card installment car purchases are relatively simple. In addition to basic materials such as identity and proof of entry, the consumer's credit record is the most important. The monthly repayment format is the same as that of ordinary credit cards. Consumers can repay through a variety of online and offline methods in a flexible manner.

Disadvantages: Limited models and credit limit, handling fees and limit limits

All bank credit cards generally have cooperative car brands, so there are limitations in choosing car models. In addition, the credit card for installment car purchase business has a limit, which depends on the credit qualification approved by the bank. It is worth mentioning that although there is no interest for installment car purchases with credit cards, there are installment handling fees. The rates vary from bank to bank, generally ranging from 5% to 18%.

Auto Finance Company

In addition to the bank channel, another major channel is to apply for a car loan through the dealer through the auto finance company behind it. There are currently about 20 auto finance companies in China, most of which are wholly-owned companies or joint ventures under major automobile groups, such as SAIC-GM Finance, Volkswagen Finance, Toyota Motor Finance, Beijing Hyundai Motor Finance, etc. The loan interest rates of each company are related to their loan products. For example, in order to meet the car purchase needs of different customers, Beijing Hyundai Auto Finance Company has launched a variety of financial products such as 5050, E-loan, upgrade loan, and maintenance loan.

Advantages: fast approval process, rich types of financial products

The threshold for buying a car through a loan from an auto finance company is low, the loan is convenient, and the approval and loan time is faster than that of a bank. In addition, because auto finance companies provide a wide range of financial products, consumers can choose products that suit them based on their actual circumstances.

Disadvantages: The interest rate is relatively high, and it is often tied to other businesses with dealers

The loan repayment interest rate is relatively high. And when you apply for a loan from an auto finance company through a dealer, you are often required to purchase designated auto insurance or pay a renewal deposit and wait.

P2P Financial Platform

With the expansion of loan demand, new loan channels have emerged under the influence of the Internet. P2P financial platforms are one of the emerging loan channels, and consumers can also apply for car loans through such platforms. The advantage of P2P is that the lower loan threshold helps more borrowers. Compared with banks’ high threshold, cumbersome procedures, long time and various attachment conditions of automobile finance companies, it is indeed more convenient to apply through P2P finance companies. Convenient and fast, but the interest rate is higher.

Take a P2P financial company that cooperates on the NetEase Auto Finance platform as an example. Consumers purchased a new 5-seater Santa Fe 2.4L automatic four-wheel drive smart naked car in 24 installments with a down payment of 30%. Next, a down payment of 74,900 yuan and a monthly payment of 9,141 yuan are required.

Advantages: Low threshold, convenient and fast, covering all car models

Compared with traditional institutions, it is more convenient to apply for a car loan through the P2P financial platform. Consumers can fill in the information online and upload it Information; only need to pass the credit investigation, no third-party guarantee or mortgage is required. Once approved, the loan is disbursed quickly, usually within a week or even within a day or two. In addition, since P2P financial companies generally lend money to consumers' personal accounts, there are no restrictions on the vehicle models to apply for.

Disadvantages: High interest rates

The annual loan interest rates of relatively reliable P2P financial companies are generally around 20%, which is relatively high. In addition, since the online lending industry is a mixed bag, consumers are advised to choose high-quality, reputable P2P financial platforms.