From May 2026, the extremely tempting-sounding "7-year low-interest car loan" in the domestic auto market has officially become history.

Just three months ago, in order to snatch customers in a brutal price war, more than 13 car companies such as Tesla, Xiaomi, and Ideal collectively set off a "financial war" and launched a 7-year car purchase loan plan. This kind of "low monthly payment" or even "zero interest" financial products were once regarded as a "blockbuster weapon" to stimulate sales. However, this craze took a turn for the worse at the end of April, with major brands switching back to traditional five-year or even three-year plans overnight.

The gameplay of car companies relying on "elongating leverage" to stimulate sales is not working for the time being. For consumers, although the monthly payment has become higher, the total interest may be saved; For car companies, the supply of financial "supplements" is cut off, and the next step is to honestly fight for products and technology.

The 7-year ultra-long loan was completely removed from the shelves, and the monthly payment entered an upward channel

The so-called 7-year car loan only existed for about 3 months from birth to demise. The starting point of this financial promotion was on January 6 this year, when Tesla China took the lead in breaking industry conventions and launched a 7-year low-interest car purchase plan. The market responded quickly, and at least 13 car companies and more than 20 brands such as Xiaomi, Ideal, Xpeng, and Weilai quickly followed suit, quickly occupying major sales stores under the banner of "monthly payment as low as 1".

However, this seemingly inclusive financial policy came to an end on April 30. Since May 1, the official website financial calculator of mainstream brands has adjusted the maximum loan term back to 60 months (i.e. 5 years).

Behind this is not a simple adjustment of marketing strategy, but the inability of financial institutions to withstand the risk of depreciation of new energy vehicles in 7 years. For banks and financial leasing companies, cars are typical high-depreciation assets, and the market residual value of a new car is often extremely low after 7 years. Once the loan cycle is as long as 7 years, there is a high probability that there will be a "negative equity" phenomenon in the second half of the repayment, that is, the money sold by the vehicle is not enough to pay off the remaining loan.

A bank risk control person bluntly said that it is difficult for banks' existing risk control models to predict borrowers' income fluctuations within 7 years, and financial institutions will face huge bad debt losses.

For consumers, the most intuitive feeling is that the monthly payment has really risen. According to the calculations of first-line stores, the same model with a price of about 270,000 yuan, the original 7-year monthly payment may be in the range of 2,000 yuan to 2,500 yuan, after switching to the 5-year plan, although part of the interest is waived, the monthly payment has generally increased by 500 yuan to 1,000 yuan. For example, Tesla Model Y, the previous 7-year low monthly payment strategy has been replaced by a 5-year interest-free plan, but on the condition that the down payment ratio is increased to 29% and the monthly payment is 3,194 yuan.

The automobile industry has turned to "hard power" hand-to-hand combat

The concentrated ebb of 7-year car loans marks the temporary end of the stage in which the automotive industry simply relies on "elongating leverage" to stimulate sales. Under the "new normal" of the 5-year loan plan, both car buyers and OEMs need to face a more realistic financial ledger.

From a consumer perspective, although the increase in monthly payments may seem like bad news, from an objective point of view, shortening the loan term can help protect consumer rights. As a rapidly iterative consumer product, especially new energy vehicles, automobiles are rapidly updated in technology.

If the loan period is as long as 7 years, it means that consumers may still be repaying their old cars when the vehicle technology is seriously backward and the car price has depreciated sharply. Returning to the 5-year period can better match the consumer's debt cycle with the vehicle's use value cycle.

Secondly, from the perspective of the industry competition pattern, the supply of financial "supplements" will force car companies to return to product strength competition. Looking back at the beginning of 2025 to the beginning of 2026, the competition in the automobile market has been extremely involuted, from the price war at the beginning of the year to the financial war in the middle of the year, car companies have to carry out real money discounts in order to grab orders.

In the long run, this model relies on unsustainable discounts to maintain sales growth, which is an erosion of the financial reports of car companies.

Auto finance returns to rationality, and the industry is deleveraged

Han Hao, an analyst in the automotive industry, believes: "When the promotional effect of financial policies weakens, the focus of competition in the industry will shift back to the hard power of the product itself, such as cost performance, technology leadership and after-sales service." ”

This transformation is already traceable. While canceling the 7-year loan, major car companies quickly switched their strategies. Tesla pushes for 5 years of interest-free, BYD and NIO mainly promote 3-year 0-interest, and brands such as Xpeng have launched a plan to choose one of 2-year 0-interest and optional deductions. This shows that car companies have not given up on promotions, but have shifted subsidies from lengthening the cycle to direct interest rate cuts or cash equity.

The bank's re-focus on 5-year mainstream products will help standardize the order of the auto finance market and reduce potential bad debts in the future.

Although the 5-year plan is slightly higher in monthly payment, it is often accompanied by "0 interest" or "low interest", which is actually more economical than the 7-year plan from the perspective of total interest expenses.

Auto finance returns to rationality

The ebb and flow of 7-year car loans is not only an adjustment of financial products, but also a deep reconstruction of rules at the automotive industry, financial institutions and regulatory levels.

For ordinary car buying families, the era of low monthly payment to easily get on the car has come to an end, and in the future, buying a car needs to be in line with the actual income of oneself and rationally plan the loan plan. Car companies also need to abandon the marketing thinking of relying on financial policies to take shortcuts, deeply cultivate product technology and user experience, and use hard power to win market recognition.

Opportunity 1: Car companies with core technology and product strength

In the context of the weakening of financial promotion effects, car companies with core technologies and product strength will be more likely to stand out in the fierce market competition. Investors can focus on car companies that have advantages in technology, brand, service, etc.

Opportunity 2: Enterprises related to the auto finance industry chain

With the standardization of the auto finance market, enterprises related to the auto finance industry chain will also usher in new development opportunities. For example, auto finance companies, financial leasing companies, etc., will benefit from the healthy development of the market.

In the short term, although the rise in monthly supply pressure will temporarily affect terminal sales; In the long run, it can force the consumption of the auto market to return to rationality and industry competition to return to its origins, laying a solid foundation for the long-term and healthy development of the auto finance industry and the vehicle market.