Can a 10% down payment really buy a car? Keep your eyes open, the channels for buying cars with low down payments are full of tricks

You can drive the car home without spending a penny. Such advertisements are very attractive. Recently, platforms such as Dangeche, Maodou New Car Network, and Youxin Used Car have been advertising in subways and on the Internet with slogans such as "zero down payment" and "10% down payment". Not only can you drive the car without spending money, but also "purchase tax and insurance are included". Is it really such a good thing?

An investigation by an IT Times reporter found that the so-called "zero down payment car purchase" is full of scams. Not only is the actual payment price much higher than an ordinary car loan, the "inclusive purchase tax and free insurance" mentioned in the advertisement is just a gimmick, and consumers still need to pay for it. In addition, consumers need to keep their eyes open when it comes to insurance renewal and early repayment.

What is even more worrying is that since the state has clearly stipulated that the down payment for a new car must not be less than 20%, the actual ownership of these vehicles purchased with zero down payment does not belong to the consumers. Once a dispute or traffic accident occurs, it will be extremely complicated to handle.

"Lease instead of purchase" appeared in foreign countries many years ago and is a mature form of automobile financial leasing. However, after being imitated by the domestic Internet, the essence of "leasing" has been blurred. Many websites are not only suspected of false propaganda, but may even repeat the mistakes of similar Internet financial platforms such as cash loans and consumer loans, and touch the regulatory red line.

Low down payment? The balance is a "trick"

Dangeche, a joint strategic investment of Alibaba and Ant Financial, has the slogan "10% down payment for Dangeche" and its advertisements can often be seen in subways and cinemas. In the new car column of its app, five models can be purchased with zero down payment, and most of the other cars require a down payment of about 10%.

The reporter tried to buy a 2017 Volkswagen Lavida 1.6L Automatic Comfort Edition. The App showed that the manufacturer's suggested retail price was 136,900 yuan, including purchase tax and one year of insurance. The reporter saw on the page that there were 10% to 20% down payment options, and a 10% down payment was 13,600 yuan. The car purchase instructions showed that the down payment ratio of each buyer would be different based on Ant Financial's personal credit assessment.

According to the one-year installment plan given by the App, in addition to the down payment of 13,600 yuan, if it is repaid in 12 installments, the monthly payment is 2,998 yuan, and an additional 3,000 yuan delivery service fee is required. The page clearly states that the first year includes purchase tax and one year of insurance. According to this plan, the reporter calculated that the balance to be paid after one year should be 136,900 (total price) - 13,600 (down payment) - 2,998*12 (total installment payment for one year) = 87,324 yuan, and this does not include the delivery service fee. However, the plan shows that the balance that consumers need to pay is 102,600 yuan, a difference of 15,276 yuan between the two figures.

Is it because the reporter is not good at math? In response to the reporter's question, Ms. Wu, the manager of the Zhongshan North Road store of Dangeche, said that the price difference is the purchase tax, license plate fee, GPS fee, etc. of the car, but there is no specific fee list. As for the description on the website that "purchase tax and insurance are included", she avoided talking about it. The customer service staff of the Dangeche Taobao flagship store said that the purchase tax is indeed included in the first year's fee, but the balance is the residual value of the new car after one year of use, which is determined according to industry standards. It is not simply the result of subtracting the first year's payment from the guide price.

However, no matter which statement is true, it is not clearly stated in the installment plan of Dangeche. If consumers are not careful, they may pay more than 10,000 yuan without knowing it.

Similar situations are not only seen on Dangeche. Maodou New Car Network also focuses on buying new cars with low down payments. The reporter found the same 2017 Volkswagen Lavida 1.6L Automatic Comfort Edition on it, with a price tag of 136,900 yuan, including purchase tax and one year of insurance, and an additional 2,900 yuan delivery service fee. Maodou New Car does not have a one-year plan, at least 24 installments. Taking this car as an example, the plan for a 10% down payment and 24 installments is: a down payment of 13,600 yuan, a monthly payment of 5,804 yuan, and a payment of 152,986 yuan in 24 months. On Maodou's page, there is no balance payment amount written like Dangeche, but in the car purchase instructions, there is an item called the retained purchase price. The item description is "After the financial lease relationship is terminated, the lessee pays the residual value of the leased property or the contractually agreed value to obtain the ownership of the leased property. The price paid is the retained purchase price.

Mr. Zhong, a salesman at Maodou New Car Network, told reporters that the original purchase price was 5,000 yuan, but the company advanced 4,999 yuan, so after the installment period ended, the buyer only had to pay 1 yuan to transfer the vehicle. However, this statement did not appear on the official website, and the website left a lot of room for interpretation as to how much the buyer had to pay for the "purchase price" after the four-year lease expired.

The reporter calculated that, including the delivery service fee, the one-year purchase price of Dangeche is a total of 155,176 yuan. Based on the suggested retail price of 136,900 yuan, the annual interest rate is equivalent to 13.3%. In offline 4S stores, the landing price of this car is about 130,000 yuan. Based on this, the annual interest rate increases to 19.3%.

Offline 4S stores generally offer two-year interest-free loans, but the down payment must be around 30% to 40%. "This is a bank regulation designated by Volkswagen, and the minimum down payment must be 30%." A salesperson at a Volkswagen 4S store told the IT Times reporter that she recommends that qualified consumers avoid buying cars on e-commerce platforms as much as possible, because the actual payment is not cheap.

Li Qian, a lawyer at Guangdong Guangxin Junda Law Firm, told the IT Times reporter that according to the newly revised "Auto Loan Management Measures" issued by the central bank and implemented on January 1, 2018, the maximum loan ratio for self-use traditional power vehicles is 80%, that is to say, the minimum down payment is 15%~20%. Therefore, if you arbitrarily use the "zero down payment" method to buy a car, the bank may terminate the loan contract and refuse to issue the loan. You may also face the problem of the car buyer pursuing your compensation liability through litigation.

Buy a new car? No, lease a car

In order to avoid policy risks, these new or used car platforms, although their advertisements say "zero down payment, take home a new car", and their websites say "comparison between buying a new car with Maodou and buying a car with other loans", but in fact, the car does not belong to you until the balance is paid off.

Ms. Wu told the IT Times reporter that in the first year, the vehicle's ownership certificate was registered in the name of Zhejiang Dasouche Financial Leasing Co., Ltd. and was registered with a Nanjing license plate. "After one year, whether you choose to pay the balance in installments or in full, you can transfer ownership, and the transfer fees and related taxes will be borne by the platform." In addition, the IT Times reporter learned that the motor vehicle registration certificate will not be given to the buyer, and the buyer will only have the vehicle certificate and driving license. Maodou New Car Network's approach is similar to that of Dangeche. Mr. Zhong told the IT Times reporter that the transfer can only be processed after the balance is paid off.

That is to say, after consumers drive away a new car with zero down payment or 10% down payment, they only form a lease contract with the leasing company designated by the website platform. The monthly payment, strictly speaking, should be the car rental fee, and the financial leasing company is not subject to the restrictions on loan ratios by the People's Bank of China and the China Banking and Insurance Regulatory Commission. This is actually a "rent-to-buy" model that has been popular abroad for many years. Consumers can rent a car at a lower cost first. After a certain period of time, if they are satisfied with the car, they can directly buy it. This model was introduced by domestic offline 4S stores a few years ago, but it did not develop rapidly. One of the main reasons is that most of these rent-to-buy models are old models, and the probability of returning the car one year after purchase is very high. In addition, since the ownership does not belong to the car buyer, once a dispute arises, it is extremely complicated to handle.

At the Danggeche Zhongshan North Road store, the reporter met Ding Chao (pseudonym) who came to deal with a car scratch. On the eve of the Spring Festival this year, he ordered an Infiniti priced at about 300,000 yuan at the Danggeche Zhongshan North Road store, with a down payment of more than 30,000 yuan and a monthly payment of more than 7,000 yuan. When picking up the car, he found a scratch on the car. "I was in a hurry to use the car, so I took it. The Zhongshan North Road store agreed to give me a 2,000 yuan oil card or equivalent card as compensation, and I agreed." However, after waiting for more than a month, Ding Chao did not get any compensation. He called the customer service phone many times, and the customer service always answered "it's going through the process."

In a rage, Ding Chao stopped paying his monthly installments, but not only did he incur a late payment fee of about 35 yuan per day, but more than a week ago, his car was towed away by a car dealer in the middle of the night. "My company's business license and other documents were in the car, so I couldn't handle my company's affairs during this period." After repeatedly contacting customer service without success, Ding Chao could only go to the store where he picked up the car to seek a solution. "I hope to get the things out first, and then solve the problems of scratches and monthly installments," Ding Chao said.

According to Article 237 of the Contract Law of the People's Republic of China, a financial leasing contract is a contract whereby the lessor purchases the leased property from the seller based on the lessee's choice of the seller and the leased property, and provides it to the lessee for use, and the lessee pays the rent. "In the first year, the car owner and the platform are essentially in a leasing relationship. Once the car owner defaults on the repayment, the car payment paid in advance can only be handled as rent. The ownership of the vehicle still belongs to the platform, and the platform can dispose of the vehicle at will and sell it to others." Li Qian explained.

Regarding the breach of contract behavior of seizing the vehicle after the due date, Danggeche customer service told reporters that they will not inform users that the vehicle will be towed in the overdue text message notification, and of course will not inform the specific towing time. Users will only be informed after the towing occurs.

Because of this, some small "zero down payment car purchase" platforms deliberately set up obstacles so that car buyers cannot repay the loan on time, resulting in de facto breach of contract. They then directly use GPS positioning and the keys retained in their hands to tow the car away or even mortgage the car for a second time. Not only do car buyers still have to continue to pay high rents, but they also cannot get the car. This is also the "routine loan" that has recently been severely cracked down by regulators and public security departments.

An industry insider told the IT Times reporter that in addition to the risk of "ponzi loans", if a traffic accident occurs, it will definitely be more troublesome to deal with than dealing with a car under your own name, as the platform's business license, official seal, etc. will be required.

The customer service of Danggeche Taobao flagship store told the IT Times reporter that if the insurance policy is kept on the platform and you encounter a traffic accident, you can directly call the customer service hotline and they will help you resolve the issue, but there was no detailed explanation on how to handle it.

Renting and then buying? There are still many pitfalls

The financial plans of Danggeche and Maodou New Car Network both have installment plans of two years or even longer. Danggeche provides installment service for the final payment, that is, after one year, the ownership of the vehicle can be transferred, but the final payment must be repaid in installments. Since the fees paid before have exceeded 20%, the car buyer is actually reapplying for a loan in the same way as a used car. Maodou New Car is the same as the basic leasing method. Regardless of whether it is 24, 36 or 48 periods, each monthly payment is counted as rent, and the transfer of the right to use is completed after the purchase price is paid.

Both websites offer a car return service. After one year, if consumers are not satisfied, they can request a car return. But in reality, there are many conditions for a car return. For example, Dangeche stipulates that the annual mileage should not exceed 20,000 kilometers (the excess requires an over-mileage fee); the vehicle is fully inspected and confirmed to meet the requirements of the "Vehicle Inspection Standards"; the vehicle inspection and inspection does not contain the items specified in the "Major Accident Vehicle Identification Standards"; the vehicle has no unresolved traffic violation records and no fines; both parties confirm the current status of the vehicle and settle the incurred expenses, and the vehicle and related materials are delivered before the car return is considered complete. Industry insiders revealed that less than 1% of people can actually return their cars.

In addition to the difficulty in returning the car, it is not so easy to repay the loan in advance. The offline sales staff of Dangeche told the reporter that there is no penalty for early repayment, but the customer service of Dangeche Taobao flagship store said that early repayment is allowed for the next 36 installments, but the penalty is 0.5% of the monthly payment.

People from different channels have different opinions, so how is it actually done? Mr. Ma, who bought a Skoda Octavia on Dangeche, encountered a situation that caught him off guard. The down payment for the car in the first year was 13,700 yuan, the monthly payment was 1,999 yuan, and the balance was 99,900 yuan. After using it for a year, he wanted to buy the car, but felt that the interest on the balance in installments was too high, so he wanted to pay the balance in one lump sum. However, when he clicked on the Dangeche App to apply for the balance to buy the car, he found that in addition to the balance of 99,900 yuan in the total order amount, there was also an insurance conversion fee of 4,217.92 yuan. If he did not pay this fee, he would not be able to pay the balance. Mr. Ma clicked on "Apply for Renewal" again. On this page, it was shown that if the lease was renewed for one year, one year of insurance would be given, and the monthly payment would be 2,998 yuan, but after one year, the balance of 88,800 yuan would still need to be paid. In total, the cost of renewing the lease for one year was 124,776 yuan. "The insurance conversion fee is actually still included in the price," Mr. Ma told reporters, which means he was forced to buy the second year's insurance. "Although I can return the car, I feel it's a loss to spend this money after driving it for a year. If I buy it, I can actually buy a high-end version of this car based on the total price I paid."

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.