Local banks say enquiries for used vehicle loans have surged recently. But relatively few people have successfully applied because the service is fairly new in the market. Many customers also say the down payment rate is too high.
Wang Meng, staff of Beijing used-auto trading market, says, "the down payment for used vehicle transactions is a minimum of 50 percent. Buyers think the rate is too high, and some suggest the rate should be around 30 percent. After analyzing our risk and evaluating our budget, we thought if we could set the new car down payment at 30 percent, then we could do the same for second-hand autos."
Because of the difficulty involved in evaluating second-hand vehicles, banks say the down payment rate required can be no less than 50 percent. It's also very difficult to know if those cars have had any accidents or suffered internal damage. So banks suggest that higher down payments could reduce loan risks.
(CCTV March 17, 2009)
