Automakers Launch 7-Year Low-Interest Auto Financing Plans

[Financial Battle] At the start of 2026, the auto market shifted toward a '7-year low-interest' financial battle, with Tesla leading the charge by introducing ultra-long-term loans with annual percentage rates as low as 0.5%.

Core Trend: Financial Plans Replace Price Wars

Tesla partnered with SPDB and CITIC Bank in early January to offer auto loans with terms up to seven years. For the Model 3, customers can make a down payment of RMB 79,900 and monthly payments of RMB 1,918, resulting in total interest of only approximately RMB 5,512. Shortly after, brands including Xiaomi, Li Auto, XPeng, and Geely quickly followed suit, though most of their offerings are actually lease financing arrangements rather than traditional loans.

Strategic Foundation: Rent-to-Own Schemes Conceal Ownership Risks

Although models like the Xiaomi YU7 advertise an "annual rate of 1%," fine print reveals these deals are provided by leasing finance companies. These products typically use a sale-and-leaseback model, where vehicle ownership remains with the financier until full repayment. Only after settlement is ownership transferred to the user—and even then, the vehicle may be classified as a used car, negatively impacting its residual value and associated owner benefits.