Beijing wasn't designed for cars, now that there are officially 22 million people living in the city (10 years ahead of projection for that number) and many more living there unofficially something had to give. Sales of new cars in the capital were up to 580,000 according to the official figures released in 2009, and this year they may well reach 900,000 in a city that wasn't built for mass transport.
It is also one of the most polluted environments on earth, with natural erosion pushing the Gobi desert right to the doors of the city, a heavy industrial base and vehicle pollution just adds to the problem. So the government has decided to act, To reduce pollution, government leaders crafted several solutions, including the car-purchasing limit. From 2011 through 2013, the Beijing citywide limit was 240,000 new cars per year; now it is even lower, at 100,000 per year. Beijing runs a lottery for applicants, to determine who can purchase vehicles.
Immediate Impact
The initial effect on the city's dealers has been great for sales, in the last two weeks it is estimated that Beijing's dealers have sold an additional 50,000 vehicles over projections as people rush to beat the new regulations.
Many of the citizens doing the buying admit that Beijing has too much traffic, and that some curb needs to be placed on pollution levels and traffic volumes but stress that they cannot live or work without a car.
Long Term View
Longer term the legislation is bad news for dealers in the city, in that their new car sales are now restricted to 1/3 of the previous year's and further cuts may be imposed later.
However there is some good news, it also means that second hand vehicle sales will be on the rise as that all important Beijing number plate will become even more sought after and that leads to rising margins on those vehicles and more importantly for the service sector increased opportunities in repair and maintenance work.
Those hit the worst will be Chinese car manufacturers with an expectation on the ground that more expensive and cleaner technology foreign built vehicles will be given priority for registration and their owners are more likely to have the political clout and connections to push through rapid registration with local officials.
From the bigger picture of the whole market in China, it's not so much of a big deal the shortfall of new car sales in Beijing will almost certainly be compensated for during the rise of Tier 2, 3 and 4 cities over the next year so for the moment at least these sales are more like to be displaced rather than lost.
Most of us realize that we require car insurance if we have an auto. But are we all aware that to get a car loan, our credit rating has to be at least good. And even having missed a single payment may be the cause of a car loan denial. With this in mind, here are a few pointers if you are looking for an affordable car loan but have a rather unhealthy credit rating.
We all know the routine - meet the salesperson, they convince you on the car, you follow while they lead you to the office, they check out your credit rating and history. So, depending on this check, you will either be accepted the car loan or you simply will not.
For those of us that are successful, we now have a lovely car to cherish and show off to our friends and neighbors, along with a long payment period too. For those of us who were unsuccessful, well - firstly we are going to be disappointed - perhaps very disappointed! But next, we are going to be wondering what we can do to change this situation around. It's embarrassing for us and it's frustrating for us. We do not want to have to go through this again.
Well before we even enter the car dealership, we should already have a very good idea as to how much we want to spend. We should know our budget and how much we can afford. We should also have a good idea how much annual interest we are prepared to accept. Only once we have these answers can we proceed to the actual business of the car loan.
If you have been late on a loan payment before then the chances are you will need to increase the percentage rate that you are prepared to accept - perhaps by a couple of points. At the same time, you should prepare yourself for rejection from one or two car dealerships. From their point of view, they do not want to take risks, and you may well be perceived as just that - high risk.
There is another way to go here if your credit records are less than perfect. Have a look around for those car dealers who are desperate to move their cars. You will find that these dealers may well ignore the fact you have poor credit, simply because they are desperate to sell. Furthermore, you could score yourself a great interest rate on the car loan too.
Finally, if you are decent at negotiation and the thought of it does not frighten the life out of you then you should definitely negotiate with the salesperson. If you take the first price they offer you, probability is you are spending your hard-earned needlessly. If you negotiate tactfully you probably will come away with a decent saving on the auto loan and the over-all cost of the car. Next time you go to the car dealers, try negotiation. You may well be surprised just how effective you can be!
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