Commercial banks have long dominated the auto finance market with their advantages of low capital costs and large loan scale, with a market share of about 42%. Their business model is mainly based on credit card installments and auto consumer loans, relying on offline outlets and credit card user base to cover mainstream customer groups. However, their post-loan management capabilities are relatively weak, and the asset disposal cycle is long.
Auto finance companies deepen their presence in the chain
As a non-bank financial institution, auto finance companies rely on the resources of OEMs to provide interest-subsidized loans, inventory financing and other services for specific brands. Their advantages are close collaboration with manufacturers and mature risk control models, but they are limited by the single brand and have weak cross-brand development capabilities.
Financial leasing companies use the “rent-to-buy” model to provide low-threshold car purchase solutions for consumers with insufficient credit qualifications or high down payment pressure. Their product design is flexible, the down payment ratio can be as low as 10%, and the loan period can be up to 5 years, but the interest rate level is usually higher than that of banks.
Installment payment model: In order to address the pain point of large fluctuations in the value retention rate of new energy vehicles, we launched the “car-battery separation” installment plan. Consumers can for financing for the battery part alone, lowering the threshold for car purchases. Supporting finance for the battery swap model: Cooperate with battery swap station operators to provide battery leasing and battery swap service packages, convert battery usage costs into monthly rental fees, and alleviate mileage anxiety. Residual value guarantee service: Financial institutions and OEMs launch a used car repurchase plan, promising to repurchase vehicles at a guaranteed price within a certain period of time to enhance consumer confidence.
skill such as artificial intelligence and blockchain will further penetrate into pre-loan approval, loan monitoring, and post-loan disposal to improve risk control efficiency.
OEMs, financial institutions, and skill companies will deepen cooperation to build a financial service ecosystem covering the entire life cycle of car purchase, use, and replacement.
As urbanization progresses, the demand for auto finance in second- and third-tier cities will grow rapidly.