To grab a share of the lucrative car loan market, some state-own banks in Shanghai have increased the maximum loan to 80% of the the cost of a new car. Other banks are offering car-buyers preferential policies or free financial services.

Car loans can be very profitable for banks, but at the same time, cars, which are often the security, can depreciate rapidly, which is why car loans are in the high-risk category and why the business has developed slowly, China Radio International reported Monday.

It is hoped that the 'Management Regulations for Car Loans' issued in August will effectively regulate the car loan business when it goes into effect on October 1st.

Source: CRIENGLISH.com