7-Year Low-Interest Auto Loans Discontinued; Automakers Shift to 1–5 Year Financing

Recently, the widely offered 7-year low-interest auto loan products in the new energy vehicle (NEV) market have been completely discontinued. Previously, mainstream brands—including Tesla, Xiaomi SU7, Li Auto, and XPeng—had all introduced such long-term financing plans featuring low monthly payments to lower the barrier to entry for consumers. However, starting from late April, banks and automotive finance companies began phasing out these products, citing concerns that the 7-year loan term is excessively long. Financial institutions assessed that rapid vehicle depreciation could easily result in the car’s residual value falling below the outstanding loan balance, while also presenting heightened long-term credit risk and greater difficulty in collateral liquidation. Currently, all brands have uniformly adjusted their auto loan terms to between 1 and 5 years. Although total interest expenses have decreased, monthly payments are now significantly higher than under the previous 7-year plans, thereby increasing the financial burden on buyers. Authorities have not indicated whether the 7-year loan option will be reintroduced, and consumers are advised to select a suitable loan term based on their individual financial circumstances.