Di Yi Cai Jing·2025-06-22 13:00Core Viewpoint - The introduction of a cap on auto loan interest rates and credit card installment fees in Henan Province aims to curb high-interest and high-rebate practices in the automotive finance sector, promoting a healthier market environment [1][3][8] Regulatory Changes - Henan Province has set a maximum annual interest rate for auto loans at 6%, which is double the current one-year Loan Prime Rate (LPR), and a five-year credit card installment fee cap at 16% [1][3] - This regulatory move is part of a broader effort to eliminate high-commission auto finance products and prevent banks from using high commissions to lower car prices and induce early repayments [1][2] Industry Response - Major banks in Henan, including state-owned and joint-stock banks, have publicly committed to these new regulations, marking Henan as the first region to officially announce such caps [3] - Other regions, including Zhejiang, Shanghai, and Beijing, are also reported to be initiating similar corrective measures, with many banks ceasing high-interest, high-rebate collaborations with auto dealers by July 1 [2][4] Shift in Business Models - The automotive finance industry is transitioning from high-interest, high-rebate models to "low-interest, low-rebate" or "low-interest, zero-rebate" models, reflecting a significant change in marketing strategies [5][6] - For example, under the high-interest model, a consumer financing a vehicle would pay significantly more in interest compared to the new low-interest model, resulting in a difference of approximately 6,400 yuan in total costs over two years [6][7] Market Implications - Financial institutions are encouraged to adopt a balanced approach in their pricing strategies, focusing on innovative products and quality service rather than competing solely on price [8] - The overall aim is to reduce financing costs for consumers, thereby enhancing their purchasing power and stimulating economic growth [7][8]