Are you tired of waiting for taxis? Are you ready to take on the Hohhot roads? Are you certain you could get somewhere faster with your own wheels? Well, a lovely reader has submitted some thoughts for those of you considering car ownership in Hohhot.
You may remember last year we wrote about my husband’s experience getting his driving license. As you can imagine, no process is easy in China and getting a driver’s license and buying a car are no exception. However, hopefully Preston’s advice will make it easier for you, knowing what to expect before you show up at the car dealership.
1. Do cars really cost more in Hohhot?
Yes they do. Sometimes as much as 10,000 RMB more than Beijing for low-end cars.
2. Why buy in Hohhot?
“So why don’t I just go to Beijing, buy my car there, and then drive it back to Hohhot?” It’s a great idea, and one we had too. But, in a nice bit of local protectionism, the Hohhot government does not usually issue license plates to cars bought outside of Hohhot (at least this is what we were told). We did some checking to see if Linda had a distant relative in the gov’t. with the guanxi to help us pull this off, but in the end had no luck and so paid the extra 10000 to buy our car here.
Now, it’s possible that if John Smith the Foreigner went alone to Beijing, bought a car, drove it back, and then showed up at the Hohhot Department of Motor Vehicles asking for a license plate, someone would take pity on the poor foreigner and give the license plate. But this would be a pretty big risk to take!
3. New vs. used
Linda was pretty set on a new car, but we did stop and asked about second hand cars. It seemed that 60-70,000 was about the starting price for most half-decent used cars. Tough thing is that the used dealers don’t give much in the way of guarantees, so this would be a bit risky unless you knew a lot about cars. If you just want a cheap car, you can actually get the cheapest Chinese models for about this amount (though there are good reasons why they are so cheap).
4.Where to buy
There are a ton of car dealerships on Haixi Road (Haixi Lu). This is on the way out to Jinchuan district. It’s not the only place in town with cars, but it is one of the best, with 15+ dealerships spread out along a mile or two strip of road. Dealerships include Chinese car companies, Nissan, Kia, Hyundai, Ford, etc. One thing to note is that ‘foreign’ cars here are split into two groups, imports and joint venture models (pinyin: “hezi”). The imports are always a lot more expensive than the joint ventures, so if you walk into a dealership to ask for prices and are blown away by how high they are, it’s worth asking if they’re selling imports or joint ventures. Often the same company (like Ford) will have two dealerships within a short walk of one another, one selling imports and the other joint ventures.
5. Finding information on car models
Can’t find info on a car? Check Wikipedia! I knew nothing about buying cars before this, and for some reason thought car models were the same around the world. They’re not, and to confuse things even more, sometimes a company uses different names for the same car. So, for example, the car we bought is called the Hyundai Verna here in China, but the Hyundai Accent in the States. Or sometimes models are not available widely in the States, but available in China, like the Ford Ecosport. Wikipedia has a lot of (hopefully correct) information on all of this.
6. Financing the car
The key question is whether you’re looking to buy using a loan or can pay full cash. As I said, Linda being Chinese helped a lot, as I was told flat out I couldn’t get a loan as a foreigner. I didn’t really push things and try to ask if this was really true, as without a working visa and job I’m almost positive they were right. HOWEVER, I do know that foreigners in China with residence permits and jobs can sometimes use these to help with loans (I have a friend in Xiamen who did this when buying a house), so if someone with a RP and job was trying to buy a car and was given a flat ‘no’ regarding a loan, I would advise them to try to ask a manager or the loan supervisor at the dealership if they could call the bank to doublecheck things. There just aren’t a lot of foreigners buying cars in Hohhot, so I would never assume the salesperson knows what they’re talking about when it comes to this sort of thing.
We didn’t have enough money to pay in full, but I’m pretty sure it’d be easy for a foreigner to buy a car if they had all the money up front.
The financing rules are much stricter here. Each car dealership has a different bank/program they used for loans. Some dealers needed Linda to produce a certificate from a registered company saying that she was employed (impossible since she’s a freelancer), while others wanted to see her name on a certificate of home ownership. As I remember things, every dealership had a 30% down, pay the rest in 3 years option (with interest), and a couple had 20% down/3 years. At the time we didn’t see anything longer than 3 years, but when I went back a couple of days ago to service our car, Hyundai had a 5 year loan payback program.
Generally speaking, the financing requirements go higher the more years/money you want.We were basically closed out of all the bank loans because:
- Neither of us was working at a registered company;
- We didn’t want Linda’s parents to know we were taking out a loan (because if they had known they would have paid for us, which we didn’t want), and so couldn’t use their home ownership deed to cosponsor the loan;
- Linda’s name isn’t on a home deed .
If you can’t get a long term bank loan, the car companies themselves still usually have a 1 year 0% interest payback option with about 50-60% down. I think it would be very difficult, perhaps impossible, to get the dealership to give this deal to a foreigner, but it’s certainly worth asking about.
The requirements of each dealership for this plan were once again different. We were very close to buying the Ford Ecosport, a nice looking miniSUV, and were basically ready to close the deal, when the salesman said that as part of their company requirements for the 1 year/0% payback option the company had to see a driver’s license from Linda, or a proof that she had passed at least 3 of the 4 tests needed for the driver’s license. Apparently this is done to ensure that the person paying the upfront money is really the person buying the car.As Linda had only just enrolled in driver’s ed, we were out of luck with Ford.
Hyundai, however, didn’t need the driver’s license, and instead just needed a proof from Linda’s driving school that she was enrolled there. A word to the wise, if you’re somehow randomly in the same position that we were in (aka Chinese/foreign couple buying a car together with the Chinese person just starting to prep for the driver’s exam), be sure to tell the driver’s school before enrolling that you’ll need them to give a proof of enrollment. Our school was pretty unwilling to do this, and we almost weren’t able to get the car because of it–luckily the school finally agreed.
7. Can you negotiate?
Of course you can bargain! Just like buying a car in the states, your salesman has the authority to bargain on price, extras, warranty, etc. By the end we had talked 6,000 RMB off the asking price, gotten an extra fourth year warranty, and a ‘free’ DVD/GPS system, ‘free’ seat covers, and ‘free’ air freshener.
8. Other expenses
Remember the taxes/registration fees. Let’s say you’ve just bought your new Hyundai Verna for 72,000 RMB, and made a 60% down payment of 44,000 RMB, with the rest of the car fees to be paid with a 0% dealership loan in 12 monthly installments of 2000+ RMB per month. Does this mean you got out of the whole thing for only 72,000? Nope. Between license registration, taxes, insurance (mandatory 1 year purchase), you’re looking at at least an extra 15,000 total, so almost 90,000 total.Taxes for more expensive cars would probably add even more, as I believe they are based on the purchase price.
9. Use of credit cards
You can use credit cards towards the ‘cash’ portion of the purchase. If you have a Chinese credit card and are looking to buy without a loan this could potentially be very helpful, as you could potentially buy the car with, let’s say 60,000 in real cash and 30,000 on your cards.
10. Other items to remember
Remember to ask about maintenance, warranties, etc. As stated mentioned above, we got the dealer to change our warranty from 3 years/100,000 km to 4 years 120,000 km. We also have a free maintenance/oil change within the first 6 months/5000 km. Some dealerships are at 3 months/5000 km, so be sure to check.
That was a lot, so three take home points:
1. It’s probably going to be a lot easier for a foreigner to buy if they can pay in full.
2. Failing that, you’d almost certainly need proof of employment and your residence permit, and even then you might run into problems when looking for a loan. It might be easier to apply for Chinese credit cards (though I have no idea how you’d do this, it seems like this should be simpler to do), and then use these to help ‘finance’ the car.
3. Go to a lot of different dealerships, and don’t accept your first (or second or third) ‘no’ as being the truth for all dealerships. Loan requirements/amounts vary greatly from dealership to dealership. A ‘no’ at Ford might just turn into a ‘yes’ at Hyundai, as it did for us.
If you’re willing to take the plunge, having the freedom to drive your own car really is a great feeling, with the only trick being to watch out for pedestrians, motorcyclists, 3 foot deep potholes, dogs, children, surveillance cameras, buses, and everything else that makes driving in China so much fun!