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Loan for a Chinese car: terms and pitfallsLoan for a Chinese car: terms and pitfalls">

Loan for a Chinese car: terms and pitfalls

Alexandra
Alexandra
1 min.
Used cars
March 13, 2025

A Chinese car loan is becoming an increasingly popular way to buy cars from Chery, Geely and BYD in Russia in 2025. With rising car prices and increasing interest in Chinese brands, car loans offer an affordable way to own a new vehicle. However, as with any financial decision, there are terms and risks involved. In this article, we will look at how to apply for a car loan from China, what conditions are offered by banks, and what to look out for to avoid pitfalls.

What is a car loan and how does it work?

A car loan is a targeted loan that is issued by a bank for the purchase of a car. The car becomes collateral, which reduces the risks for the bank and allows it to offer more favourable rates compared to consumer loans. A Chinese car loan is usually arranged through a car dealership or directly with a bank, with a down payment from 10% and a term of up to 7 years.

In Russia, banks such as Sberbank, VTB and Alfa-Bank are actively working with Chinese brands, offering special programmes. For example, buying a Geely Coolray on credit through Sberbank can include a rate from 10% per annum, which makes such deals attractive for buyers.

Terms of crediting the purchase of a Chinese car

The terms of a Chinese car loan depend on the bank, the model and the borrower's financial status. The main parameters include:

  • Interest rate: In 2025, rates range from 9% to 15% per annum. For example, VTB offers 10.5% for new Chery Tiggo 8 Pro models.
  • Initial instalment: Typically from 10% to 30%. For a BYD Han costing RUR 3.5 million, the contribution may be RUR 350,000.
  • Loan term: 1 to 7 years. A shorter term reduces the overpayment, but increases the monthly instalment.
  • Insurance: Compulsory MTPL and CASCO, which adds to the costs. For example, KASKO for a Geely Monjaro may cost 25,000 roubles per year.

In addition, banks require proof of income (2-NDFL certificate) and age from 21 to 65 years. Some programmes, such as those of Alfa-Bank, allow you to apply for a loan without references, but with an increased rate.

Advantages of a Chinese car loan

One of the major pros of a Chinese car loan is affordability. Chinese cars cost less than their Japanese or European counterparts, which reduces the loan amount. For example, a new Chery Tiggo 7 for 2 million rubles will require a smaller loan than a Toyota RAV4 for 3.5 million.

Banks also offer special programmes for Chinese brands. For example, Sberbank together with Chery gives a rate of 9.5% when buying a Tiggo 8 Pro, if you make a 20% down payment. Moreover, the loan allows you to spread the payments, which is convenient for the family budget.

Pitfalls of a car loan for a Chinese car

Despite the advantages, a loan for a Chinese car has its risks. Firstly, hull insurance increases costs. If you refuse hull insurance, the loan rate may increase by 2-3%. For example, for a Geely Atlas, the rate without hull insurance can rise from 10% to 13%.

Secondly, the interest overpayment can be significant for a long term. For a BYD Song Plus costing 3 million roubles at a rate of 12% and a term of 5 years, the overpayment will be about 1 million roubles. In addition, Chinese cars lose value quickly, which can be a problem when selling.

Hidden commissions and additional costs

Many banks include hidden fees that increase the cost of the loan. For example, some require account maintenance fees or early repayment fees. VTB, for example, may charge 1% of the amount for early closure of the loan in the first 2 years.

Additional costs also include mandatory life insurance, which can add 0.5-1% to the rate. For example, for a Chery Tiggo 4 costing 1.5 million roubles, life insurance can cost 15,000 roubles a year.

Reputable Chinese cars and resale value

Chinese cars are losing in price faster than their competitors. For example, a Geely Coolray after 3 years may be worth 50% of its starting price, while a Toyota Corolla will retain 70%. This is important to consider if you plan to sell your car after paying off your loan. Moreover, some banks may limit the choice of models, considering rare Chinese autos such as the Xpeng P7 as less liquid.

How to choose a car loan from China?

Chinese car loan: overpayment schedule with interest and fees.
Financing a Chinese car: loan overpayment schedule.

To apply for a favourable Chinese car loan, follow these steps:

  • Compare offers from banks such as Sberbank, VTB and Tinkoff.
  • Choose programmes with a minimum down payment if your budget is limited.
  • Examine insurance terms and fees.
  • Calculate your overpayment with a loan calculator.
  • Make sure that the selected model, such as Geely Monjaro, is supported by the bank.

For example, choosing a loan from Alfa Bank with a down payment of 15% and a rate of 11% for Chery Tiggo 8 can reduce the monthly payment to 35,000 rubles for 5 years.

Popular models to buy on credit

Chery Tiggo 7 Pro, Geely Atlas and BYD Han are popular among Chinese cars. A Chery Tiggo 7 Pro costing 2 million roubles with a 5-year loan and a rate of 10% will require a payment of about 40,000 roubles per month. A Geely Atlas for 2.5 million with the same rate will cost 50,000 rubles. A BYD Han for 3.5 million with an electric engine may be more expensive to insure, but is economical to run.

Each model has its own distinctive features. The Tiggo 7 Pro is suitable for families, the Atlas for long journeys and the Han for environmentally conscious buyers. The choice depends on your priorities.

Comparison with other purchasing methods

If you compare a loan for a Chinese car with a cash purchase, a loan allows you to spread the costs. Buying a Geely Coolray for 1.5 million roubles immediately requires the full amount, whereas a loan with an advance of 150,000 roubles and payments of 30,000 roubles per month is more flexible.

Compared to leasing, a loan gives you more freedom. Leasing a Geely Monjaro with payments of 40,000 roubles per month limits mileage and requires the car to be returned, whereas a loan allows you to buy back the car. However, leasing can be more favourable for businesses because of tax benefits.

Prospects for Chinese car loans

By 2030, the share of Chinese cars in Russia may reach 30%, which will increase demand for car loans. Banks are already adapting by offering special programmes for Chery and Geely. For example, Tinkoff Bank has reduced rates for electric models such as BYD Han to 9% if purchased through a car dealership.

In addition, the growth of local production, such as Chery assembly in Kaliningrad, can lower the cost of cars and make loans even more affordable. This will improve the financing conditions for the Chinese car in the future.

How to avoid the pitfalls?

To avoid problems when applying for a Chinese car loan, follow these tips:

  • Read the contract carefully, especially the fine print.
  • Ask about hidden commissions and early repayment terms.
  • Calculate your budget with insurance and maintenance in mind.
  • Choose reliable models with a good reputation, such as the Chery Tiggo 8.
  • Check your credit history before applying.

For example, choosing a loan from Sberbank with transparent terms and a rate of 9.5% for the Geely Atlas can minimise the risks of overpayment.

Bottom line: is it worth taking out a loan for a Chinese car?

A Chinese car loan is a convenient way to become a car owner without a large one-off cost. Models such as the Chery Tiggo 7 and Geely Atlas offer modern technology at an affordable price, and low bank rates make lending attractive. However, hidden fees, insurance and rapid loss of value require careful consideration.

If you are prepared for the extra expense and choose a proven model, a loan may be a favourable solution. Otherwise, a cash purchase or lease is worth considering, especially for businesses. In 2025, a car loan from China is a balance between affordability and risk that requires careful calculation.