"Seven-Year Low Rates" Spark Car-Buying Frenzy: Real Deal or Hidden Risk?

In an effort to boost sales, automakers including Tesla, Xiaomi, Li Auto, and XPeng have rolled out "seven-year low-interest" car financing plans, with down payments as low as RMB 49,900 and monthly installments of just over RMB 2,000—apparently significantly lowering the barrier to car ownership. Some offers feature annual percentage rates (APRs) as low as around 1%, potentially saving buyers tens of thousands of yuan in interest compared to conventional auto loans. However, caution is warranted: apart from Tesla, most brands use a "financial leasing" model, under which the vehicle’s ownership remains with the financing company throughout the seven-year lease term, granting consumers only usage rights. Buyers may also face hidden costs such as GPS installation fees and lien-release charges. Moreover, the qualifications of partnering financial institutions vary widely, raising risks of ownership disputes. Industry insiders warn that while low monthly payments are tempting, the long repayment period brings considerable uncertainty. Given the rapid pace of electric vehicle (EV) technological advancements, a car could become outdated before the loan is fully repaid. Consumers are strongly advised to read contracts carefully and act within their financial means.