The People's Bank of China and the State Administration for Financial Supervision jointly issued the Notice on Adjusting Policies Related to Automobile Loans on April 3, 2024.
The most important change is that the financial institutions are allowed to determine the maximum loan ratio for self-use fuel vehicles and electric vehicles, under the premises of compliance and controllable risks, as an innovative instrument.
As a comparison, the maximum loan ratio for commercial fuel vehicles and electric vehicles is 70% and 75% respectively. And the ratio for second-hand cars is 70%.
The significance of this notice is to allow more people to have access to automobiles and give relevant financial institutions greater freedom, which is expected to significantly boost the automobile market, while accelerating the circulation and trading of second-hand cars.
Written by Aggie Hu, huchenying@mysteel.com