Two departments increase financial support for automobile consumption
Guangming Daily, Beijing, April 3 (Reporter Wen Yuan) – The People’s Bank of China and the State Financial Supervision Administration have jointly issued a notice aimed at increasing financial support for automobile consumption in order to promote the replacement of old cars with new ones and stabilize and expand automobile consumption.
The notice, titled “About Adjustments to Auto Loans,” allows financial institutions to independently determine the maximum loan disbursement ratio for self-use traditional power vehicles and self-use new energy vehicles based on the borrower’s credit status and repayment ability. Under the new guidelines, the maximum issuance ratio for commercial traditional power vehicle loans is 70%, while the maximum issuance ratio for commercial new energy vehicle loans is 75%. Second-hand car loans have a maximum distribution ratio of 70%.
Financial institutions are encouraged to innovate financial products and services, particularly focusing on segmented scenarios such as new cars, second-hand cars, and car trade-ins. The notice suggests reducing or exempting liquidated damages caused by early settlement of loans during the car trade-in process, in order to better support reasonable car consumption needs.
Furthermore, all financial institutions are required to determine the specific proportion and period of auto loan disbursement based on their respective auto loan policies, risk prevention and control measures, and other factors. Loans must be granted based on the borrower’s credit status and repayment ability while adhering to laws, regulations, and interest rates. Additionally, strict measures will be put in place to prevent loan funds from being misused for other purposes.
These new policies are expected to provide a significant boost to the automobile industry and incentivize consumers to invest in new vehicles, ultimately driving economic growth in the sector.