Buying a New Car in China

Information on the paperwork and processes involved when buying a new car in China...

The car market in China is booming as cars become more affordable to Chinese people. Car dealerships are being opened all over China and both domestic and imported cars are available. Chinese cars are generally much cheaper than imported vehicles.

Prior to buying a car in China foreigners must get a People's Republic of China (PRC) driver's licence, as foreign or international licences do not allow the holder to drive in the country.

Buying a New Car

When choosing a car dealership it is advisable to go to one that has been recommended by someone else. Many dealerships help with all of the registration paperwork and some dealerships in major cities also have specialist services for expatriates. Bargaining is normal; if a buyer doesn't speak Chinese it is often worth taking a Chinese friend to assist with the process. It is possible to test drive a car in most dealerships, although it is necessary to have a PRC driver's licence to do so.

The total cost of purchasing a new vehicle includes:

  • The price of the car
  • Emissions test fee
  • Registration fee
  • Taxes: road, appraisal and user
  • Insurance
  • Licence plate

Licence Plates

The total cost of buying a new car can increase considerably due to the cost of a licence plate. The Chinese government controls the number of plates issued each month in an attempt to reduce the severe congestion and smog in the major cities. In some cities, such as Beijing, licence plates only allow the vehicle's owner to enter the city on certain days of the week. Many major cities operate lotteries or auctions to assign new licence plates to prospective buyers. Controls and restrictions are strongest in Beijing and Shanghai. Lotteries and the sale of licence plates take place at local motor vehicle departments.

Auto Loans

Foreigners who have lived in China for at least one year are eligible to apply for auto loans to help them purchase a vehicle. Loans are available from credit unions and auto-finance companies run by car manufacturers. Finance should be in place before attempting to buy a car.