Multiple Automakers Offer 7-Year Auto Loans; Banks Stay Cautious Over Risk

Since the beginning of this year, automakers including Tesla, Xiaomi Auto, and Li Auto have rolled out seven-year auto loans featuring low interest rates and low monthly payments to lower the barrier to car ownership, sparking a wave of financial promotions in the automotive market. These loans primarily come in two forms: bank loans and financial leasing, which differ significantly in terms of vehicle ownership, risk control mechanisms, and total cost of ownership. Despite automakers’ aggressive push into this space, banks remain reluctant to participate in such long-term auto loans due to concerns over rapid vehicle depreciation and high default risks. Industry experts caution consumers to carefully calculate total expenses, clearly understand the nature of their contracts, and remain vigilant about the potential financial risks associated with ultra-long-term loans.