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Poster News reporter Sun Laibin reports

"Five-year loan, two years of interest-free" and "zero down payment, five-year ultra-long loan". Nowadays, interest-free or zero down payment has become a major "selling point" to attract consumers to buy cars, and also a "magic weapon" for banks and car sales companies to seize the market. So, what is the appeal of this car loan product, and will consumers be tricked?

At a 4S store in Jinan, citizens who come to buy cars are calculating the purchase price.

Salesperson recommends loan to buy a car

Loans are cheaper than full payment

Xiao Zhao is getting married in the second half of the year. He and his fiancée have been to all the major 4S stores in Jinan these days, planning to buy a new energy vehicle that they like as a means of transportation for their family after marriage. Xiao Zhao and his fiancée originally planned to pay the full price for the car so that they would not have to bear the pressure of repayment after marriage. At present, the couple also have the financial ability to pay the full price, but almost all the sales staff in the 4S stores recommended that they buy the car with a loan.

On August 13, at a 4S store in Jinan, a salesperson was calculating the cost of buying a car for Xiao Zhao who came to see the car. "The suggested price of the car is 135,800 yuan, and you can choose to take out a loan of 100,000 yuan and repay it over a five-year period. The cash discount plus the replacement subsidy will total 21,000 yuan, and more than 9,700 yuan of interest will be returned to you for two years," the salesperson said.

It is understood that this type of loan is a "long-term loan with short repayment" loan, which can be repaid in advance after two years, and the remaining three years of the loan can be repaid in one lump sum. The salesperson told Xiao Zhao that if he bought the car in full, the discount for the whole car would be only about 5,000 yuan, and he would not be eligible for the replacement subsidy.

Xiao Zhao told the Poster News reporter that he encountered the same situation an hour ago at another brand 4S store. If he bought a hot-selling car worth 149,800 yuan with a loan, he would get a cash discount of 15,200 yuan. In addition, he could subsidize the loan interest for one year and repay the loan in advance after one year. The salesperson also strongly recommended buying the car with a loan.

Image source: Visual China

"Long-term loan, short-term repayment" interest refund for two years

How to make money from car loans?

The reporter noticed that regardless of whether the loan is repaid in advance after one year or two years, the loan term is 60 periods. However, in order to make the loan cheaper than buying a car in full, early repayment is required.

"Our store has cooperation with many banks. If a customer buys a car with a loan, the store will get a commission from the bank. We will use part of the commission to offset the customer's loan interest and return it to the customer. If the customer insists on a price reduction before buying the car, in order to retain the customer, sometimes we will return all the commission to the customer." A salesperson at a 4S store told reporters.

For banks, car loan business is also a big "cake". Poster News reporter contacted a national bank account manager, who said that the commission rate of his bank is about 13%. The reason why financial institutions cooperate with 4S stores and pay commissions is to earn loan interest from consumers.

If the 4S store really wants to repay the loan one to two years in advance, how can the bank make money? The staff member said that not all customers have the ability to pay off the loan in advance. It is understood that the annualized interest rate of consumer loans for customers with better qualifications is generally around 3%. According to the reporter's investigation, the annualized interest rate of most car loans is around 5%, which is higher than the loan interest rate of consumer loans.

Relevant industry insiders told reporters that if consumers repay their loans in advance, banks may not make money from their loan business, and may even suffer some losses. However, there is uncertainty as to whether consumers can repay their loans in advance two years later. For those who do not repay their loans in advance, banks earn interest on their loans. Because the monthly repayment amount is small, most consumers will not pay attention to the interest they pay, and the monthly loan payment pressure is relatively small. After paying off their loans for two years, most consumers choose to continue to repay their loans on a monthly basis.