Flexible car loan policy under study
CHINA is considering a flexible loan policy for car purchases to encourage automobile consumption, a major driving force for economic growth.
The loan-to-value ratio of auto purchases will be flexible and set according to macro-economic and auto industrial conditions, according to a draft decision released by the central bank and the top banking regulator yesterday.
Previously, consumers could only borrow up to 80 percent of the total car price from banks.
The move is being mulled to promote auto consumption as another key driving force of the Chinese economy, as the property market is likely to slow down next year due to tightening policies.
Earlier this month, the Ministry of Finance decided to adjust and continue a preferential car purchase taxation policy set to expire by the end of this year, with the aim of boosting automobile consumption.
Auto sales and output in China continued to expand during the first 11 months, hitting an all-time high.