Source:Economic Reference News
Gallery
Editor's Note
Is financial leasing a rental car or a car? Why is it more expensive than buying a car on installment? How to not buy expensive car insurance? Car insurance reform after the consumer can get benefit ...... Although the car financial products more and more rich, but to the consumer feeling is still like a "muddled account". Is it true that "buying is not as good as selling"? Or is it possible to consume intelligently? This issue of the Economic Reference News - Automotive Special Edition is about the hot issues that consumers are concerned about - automotive financial leasing and auto insurance reform, chatting about those things in auto finance.
Auto financial leasing "sinking" financial innovation or consumer traps
Just 10% down payment or even lower, and then according to the contractual lease period, to lease the way to pay rent month by month, can be from the hands of dealers or leasing companies to obtain the right to use the vehicle. At the end of the term, the user can choose to buy the vehicle at residual value to obtain ownership of the car or renew the lease.
This and installment payment looks somewhat similar to the car purchase, quietly emerged in recent years, with ultra-low down payment, especially by the four or five lines and the following areas of the sinking market favor. However, it cannot be avoided that the financial leasing mode of "buying a car into a rental car" of the voice of doubt, and even triggered a "group" rights. The car financial leasing has been labeled as "unreliable" by some people.
Industry experts believe that the financial leasing to revitalize the auto consumer market, so that temporarily do not have the ability to purchase a car potential customers into real consumers, has its practical significance. However, as a new way of car consumption, in addition to the need for consumers to know the rules and familiarize themselves with the process, it is even more critical to build a perfect "four beams and eight pillars" at the beginning of the development of the industry, standardize the industry's business order, so that consumers enjoy the right to be fully informed, and resolutely put an end to the exaggerated, foolhardy consumer traps. At the same time, the cultivation of the strength of the formal industry enterprises, play a "good money to expel the bad money" purification role.
Knocking on the door of the sinking market
In fact, the financial leasing sales model is not the first in the automotive industry, the model has existed for many years in the market of aviation, shipping, medical equipment, electric power equipment, etc., for the lowering of the threshold for the purchase of large-scale equipment to reduce the burden of the purchase of large amounts of capital occupied by the buyer, the activation of the market potential to play a key role. The statistics show that 10 years ago, China's airline fleet size of only 1400; at present, China's civil aviation in service aircraft more than 3500, of which almost half of the more than introduced through the leasing method.
Automotive finance commentator Zeng Guang said, automotive financial leasing is also known as "rent to buy", which is the biggest difference with the traditional installment car purchase, is that this model will be the right to use the car and ownership separation. Consumers to obtain the right to use the vehicle in the form of a long-term lease, and then pay rent every month until the end of the lease period consumers can choose to buy the vehicle according to the residual value of the vehicle. At that point, the ownership of the car is transferred to the consumer after the transfer of ownership is completed.
The most eye-catching thing is that the down payment is significantly reduced or even zero down payment, which invariably expands the size of the group of car buyers.
The development of the automotive financial leasing market is accompanied by the rise of the industry's leading companies. The first camps, such as Maodou New Car, Bouncing Car, and Peanut Good Car, are getting bigger and bigger, and the advertisement of "start a new car with a down payment of 3,000 yuan" is unforgettable. For the industry, the car financial leasing model means both the expansion of consumer groups, but also means a lucrative business.
"Consumers in the sinking market are more sensitive to price, and their overall income level may not be high." Bai Ru Bing, senior vice president of Car Good Group and head of Maodou New Car, said that auto financial leasing finds a balance between consumers' desire to buy a car at a low threshold and selling a car with a low down payment but with some protection.
The confidence of the domestic industry in the automotive financial leasing market also stems from international comparisons. The data shows that the penetration rate of financial leasing in new car sales in the U.S. market is more than 30%. In the domestic automotive market, Avery Consulting's 2019 China Automotive Financial Leasing Industry Research Report shows that the penetration rate of China's automotive financial leasing was only 4.4% in 2018, which still has a lot of potential.
In addition to stimulating the consumption of new cars, financial leasing also has a predictable driving effect on the used car market. According to Luo Lei, Deputy Secretary General of China Automobile Circulation Association, most of the current used car market is still for private sale, and the financial leasing model can drive the supply of more used car sources, which in turn promotes the growth and formalization of the used car market.
Where does the "unreliable" label come from
Auto financial leasing seems to be a "set of all favorites", in fact, it is as a kind of leverage of the way to consume. The company's business model has a long way to go before it can be understood and accepted by consumers, or else it will be easy to get stuck in a quagmire of complaints and rights violations.
To " car " " financial leasing " as the key words in the Chinese referee network search can be found, the relevant records have nearly 11 million. Among them, there are a considerable number of cases where the core point of the dispute lies in confusing the difference between the two ways of purchasing a car: financial leasing and installment payment.
The experience of Kunming citizen Li Mou's purchase of a car in the car financial leasing dispute is quite representative. According to the civil judgment of the People's Court of Yuhang District, Hangzhou City, Zhejiang Province, Li Mou purchased a new Honda Accord car through the Tmall store of an automobile financial leasing company in April 2018, and paid a 20% down payment of 47,900 yuan for the purchase of the car on the same day.
Li said, a year later in the App to pay the final payment for the purchase of the car, only to find out that he is not the owner of the purchased vehicle but the vehicle lessee, automobile financial leasing company is the owner of the vehicle and the mortgagee. He also realized that the down payment and monthly payment he had previously made were not the purchase price of the vehicle, but the rent of the vehicle, and that the one-year purchase and sale contract was actually a one-year lease contract. He also emphasized that he did not know about the financial lease, and the company did not express or mention it.
The automobile financial leasing company argued that the contractual relationship between the two parties in the first year is in line with the legal characteristics of the financial leasing contract. Moreover, Li Mou at a very low cost to quickly achieve the goal of using about 200,000 yuan of vehicles, and effectively enjoy the financial leasing to bring the pressure of low advances, fast approval, light tax burden and flexible repayment methods and other convenient, while the company has borne the cost of the vehicle purchase costs, insurance premiums, transportation costs, vehicle licensing fees, vehicle purchase tax and the risk of vehicle damage and depreciation.
In the end, the court did not support the Li claim that the agreement was not established, invalid. For the focus of the case whether the car financial leasing company fraud, the court found that also can not be established. This case from the level of judicial practice, to answer the question of the legitimacy of the car financial leasing model, rather than some consumers understand the "buy a car into a rental car" scam.
However, even if there is no problem with the business model itself, some consumers in a similar situation to Li formed a "victims' rights group" and chose to "embrace" the warmth, focusing on the process of purchasing a car under financial leasing. They focused on reflecting new problems such as "being fooled" and "low threshold for initial review" in the process of purchasing a car under financial leasing. They believe that these problems have led to their actual cumulative expenditures to purchase a car burden is too heavy.
From the information disclosed by the defenders, they are in the process of purchasing a car in some financial leasing companies, the initial audit is not complicated, only ID card, valid driver's license and Alipay account and other basic information, you can pass the assessment, with a low down payment to get a car in a short period of time. However, the second year of the transfer of the audit is often more stringent, resulting in some people can not pass the installment payment of the final payment audit, had to pay the final payment at once or hold off on renewing the lease for another year.
These consumers can hardly afford to take out more than 100,000 or even hundreds of thousands of large sums of money to pay the final installment at one time, and at this time, if they choose to return the car, they will have to face a large amount of liquidated damages, which puts them in a dilemma. "Paid more than a year's rent, in the end nothing." This is also a lot of consumers on the road of the rights of consumers.
Industry insiders point out that automotive financial leasing due to the lower down payment threshold, the consumer subsequent repayment of the loan will be relatively higher than the amount required by the traditional mortgage, so the need for consumers to correctly assess their own subsequent repayment ability.
It's worth noting that in the real world of car sales, it's impossible to rule out the possibility that some consumers may have wanted to buy a car in installments from a bank, but without being fully informed, the individual car dealerships have gone for financial leasing in order to make a high profit. There are also merchants who recklessly exaggerate the benefits of automobile financing and leasing to lure consumers into signing financing and leasing contracts. In addition, some "loan sharks" also cheat consumers under the banner of automobile financial leasing. As a result, more and more consumers are labeling financial leasing as "unreliable".
New model also needs rules to escort
Not long ago, the Tianjin Municipal Finance Bureau issued the "Opinions on guiding the city's financial leasing companies to develop automotive financial leasing business in a compliant manner", which further clarified that financial leasing companies should follow the principle of honesty and fairness in carrying out their business activities, and should provide products and services in an appropriate form, truthfully, accurately, and in a fair and reasonable manner. appropriate form, provide the lessee with relevant information in a truthful, accurate and complete manner, hint at possible risks, and refrain from false records and misleading statements. This releases a signal that the local government will further strengthen the compliance management of the automobile financial leasing business.
In addition, in April this year, the National Development and Reform Commission, the Ministry of Science and Technology and other departments jointly issued the "Notice on Several Measures to Stabilize and Expand Automobile Consumption", which put forward the need to make good use of automobile consumer finance, and in June, the China Banking Regulatory Commission issued the "Interim Supervisory and Management Measures for Financing and Leasing Companies". The introduction of these policies has boosted confidence in the orderly development of the automotive financial leasing business.
As an important part of automotive finance, the key to the healthy and orderly development of automotive financial leasing business is to be fair, just and transparent, to form clear terms and conditions, and to establish a benign development mechanism with the participation of top-level design. The first thing you need to do is to get your hands on some of the most popular products and services in the world," he said.
Bai Ru Bing frankly said, the industry to really bigger and stronger, it is imperative to remove the "unreliable" label in the provision of car sales services and signing contracts to fulfill the obligation to inform, in a variety of ways to effectively protect the consumer's right to know, and constantly improve the quality of service, and promote the automotive financial leasing to become a reliable mainstream car purchase. The company's financial leasing program is a good way for consumers to buy a car.
Financial leasing of cars with a one-time full-payment car purchase, installment purchase of cars, compared to the advantages and disadvantages of each. Experts say that consumers should first have the right to know, to fully understand the financial leasing purchase mode, the right to use the car and ownership of the separation of the real situation. Under the premise that salespersons do not exaggerate, consumers make choices in accordance with their true will. As long as the choice is made, it should be performed in accordance with the spirit of the contract, after all, at the beginning of the choice of financial leasing to buy a car has enjoyed the ultra-low down payment of the real convenience.
At the same time, in terms of supervision, the relevant departments in the violation of the consumer's right to information and other unlawful enterprises to strengthen the disciplinary efforts at the same time, but also should pay attention to the industry's compliance with the protection of enterprises and support.
Comprehensive reform of auto insurance "full month" consumers can benefit
Premiums are down and up
Hefei He Xiao recently renewed his car insurance, found that the premiums compared to the previous year downward The first time I saw this is when I was a kid, and I was a kid, and I was a kid. "Previously, I have been listening to the salesman said that the premiums down, I did not expect the premiums really down."
He Xiao found that not only the premium down, car damage insurance coverage content than in previous years also more. The theft insurance, glass insurance, spontaneous combustion insurance, water-related insurance and other types of insurance originally required additional money to buy, after the reform, on the basis of the existing protection responsibility, the new seven aspects of insurance responsibility, to provide owners with more comprehensive car insurance protection services.
After this auto insurance reform, the coverage of third-party liability insurance has been increased accordingly. After the reform, the limit of third-party insurance can be bought up to 10 million yuan, so as to better meet the needs of consumers' risk protection, and better play the role of insurance economic compensation and resolve conflicts and disputes.
Wang Xujin, director of the Insurance Research Center of Beijing Technology and Business University, believes that the comprehensive reform of auto insurance "to improve quality and reduce prices, benefiting consumers", not only in the reform of compulsory insurance, but also in the reform of car damage insurance. Before the reform of the car damage insurance there is insufficient coverage, the expression of the problem of unclear, to the insurance and claims increased complexity. The new regulations take into full consideration the risks and pain points faced by consumers when using their cars, expanding the scope of coverage, while lowering the deductible and reducing the number of deductible items, which can better meet the needs of consumers for multi-level and diversified risk protection.
"After this reform, car damage insurance does achieve more concise and clear, reduce disputes, eliminate conflicts, reflecting the ultimate purpose of this comprehensive reform of auto insurance." Wang Xujin said, because the car damage insurance to expand the scope of coverage, integrated the original need to independently choose and buy additional insurance content, decided to car damage insurance substance of the quality of the rise. In layman's terms, it is to spend less money, buy more services.
In addition, from the absolute value of the price point of view, Wang Xujin said, the reform will be commercial car insurance products set additional cost rate cap from 35% down to 25%, the expected payout rate from 65% to 75%, the reform of the commercial car insurance benchmark premium price dropped significantly, which is also the owners feel a reason for the reduction in price.
"For the majority of car owners, the most influential factor in the price of car insurance is still the number of insurance." Wang Xujin said that the rewards and incentives for different car owners are more mature, with a good driving record of car owners deserve better treatment; accordingly, the owners of more traffic accidents, the cost of driving is increased. Through price differentiation, it is effective to guide drivers to change their driving habits and improve their safety concepts.
Compressing the space of vicious competition
The reform of commercial auto insurance set the upper limit of surcharge rate from 35% down to 25%, compressed the space of vicious competition.
An insurer said that in the past, insurance companies more in the form of rebates to attract customers, the car insurance market cash back amount is different, resulting in the market for the fight for customers to produce vicious competition. Some insurance companies promised the amount of rebate did not materialize, the owner of the right to no avail, the vicious competition is ultimately detrimental to the interests of car owners.
"After the reform, the insurance company directly reduce premiums, the proportion of cash back to customers is very low, the premium basically does not exist in a large difference, to avoid some vicious competition." The above insurance company said, the future customers choose insurance companies will no longer be high or low premiums as a reference standard, but more inclined to choose the rescue claims service efficiency of the company.
Wang Xujin believes that the absolute advantage in commercial competition has shifted from price to service. This comprehensive reform of auto insurance is the epitome of the industry competition and the development of the times, the core should be to allow owners to get quality service to reduce the level of service as a prerequisite for blindly low prices is not desirable. Insurance companies and products that can balance the price advantage and play a service advantage will stand out in the era of new regulations, substantially reducing the cost and risk of consumer choice and attracting a group of loyal customers.
Insurance companies face the pressure of profitability
The reform is wide-ranging and strong. Analysts expect that after the reform, the benchmark premium price of commercial auto insurance fell, and the scale of auto insurance premiums may also decline, and even underwriting losses. Although the industry is facing a period of pain, only reform can solve the long-standing problems in the auto insurance market. Insurers need to act proactively and face the challenges head on.
Moody's Investors Service released a report arguing that the auto insurance premium reform, which will be implemented from September 2020, will reduce auto insurance rates and expand coverage, which will weaken the underwriting profitability of property and casualty insurance companies in the next 12 to 18 months. "To offset the rise in auto insurance claims, we expect property and casualty insurers to rein in commission expense growth. Coupled with slower growth in investment income due to lower bond yields, P&C insurers are likely to see a decline in earnings over the next 12 to 18 months." Moody's analyst Carmen Kwok said.
This comprehensive reform of auto insurance will also force the insurance industry to transform and upgrade. Industry insiders said that the profitability of auto insurance is low, and after the reform of insurance companies will be more difficult to operate, the industry will gradually differentiate. PICC, Ping An and other large insurance companies will reduce operating costs through the scale effect, through technology-enabled, optimize the level of pricing and risk identification capabilities of insurance companies, and gradually explore the provision of customized auto insurance services for consumers, while some of the small insurance companies do not have the ability to technology-enabled, or will gradually be squeezed out of the market.
Zhu Junsheng, a researcher at Tsinghua University's Wudaokou Institute of Finance, China Insurance and Pension Research Center, said that the comprehensive reform of auto insurance in the short term may bring three aspects of the impact on the market: First, it may cause a slowdown in the growth of premiums, or even negative growth, insurance institutions should actively respond to the pressure of business growth, and switch from high-speed growth to high-quality development, and at the same time, actively expanding the market of non-automobile insurance, and promote the structural adjustment of the insurance business. Structural adjustment. Secondly, it may result in rising claim rates, compressed expense ratios, reduced underwriting profits or even underwriting losses. Insurance institutions should actively respond to the pressure on profitability, change the sloppy business model, build up refined and specialized management capabilities, and enhance the pricing ability of segmented risks. Thirdly, it may cause the industry concentration to increase, large companies in the premium income acquisition and profitability has the advantage of economies of scale, small and medium-sized subjects are facing a lot of market competition pressure, can take the initiative to withdraw from the car insurance market does not have a comparative competitive advantage, or in-depth excavation of the car insurance market segments, to cultivate core competitiveness.