Buying a New Car in China as a Foreigner 

While it is not super common for expats to buy a car in China, it is possible, but there are a few hoops to jump through. Getting a license plate may be a lot more challenging than the actual process of buying a car itself. 

Prepare yourself for the adventure of buying a new car in China with this guide. 

Disclaimer: This article may include links to products or services offered by ExpatDen’s partners, which give us commissions when you click on them. Although this may influence how they appear in the text, we only recommend solutions that we would use in your situation. Read more in our Advertising Disclosure.

Do You Really Need a Car in China?  

It might be a good idea to ask yourself whether it’s really worth the bother to buy a new car in China.  

Many cities impose strict limits on the number of cars which can enter central areas. You might find that you are only allowed in the city on certain days: Beijing, for example, often restricts driving within the Fifth Ring Road based on the final number of the license plate. This is known as ‘road space rationing’. 

Also remember: 

• Most first tier Chinese cities have excellent public transport infrastructure, and if you’re commuting to work, whizzing underground on the metro is usually a better option than sitting in traffic for hours.
• Cycling is very safe, with most cities set up with wide bike lanes. Rental bikes can be picked up in most locations, and you can get some healthy exercise along the way. E-bikes are affordable, with charging points at virtually all compounds. 
• It is also affordable to hire a full-time car and driver for daily commutes. Didi Dache is China’s all-conquering equivalent of Uber and offers prompt, cheap ride-hailing services.

Learn More: Buying a Used Car in China as a Foreigner

Which Brand to Choose?

When choosing a car in China, it’s important to consider reliability, maintenance, affordability, and personal preferences. It’s always a good idea to do your own research and test drive the vehicles before making a final decision. 

Volkswagen is a popular car choice due to its reputation for reliability and durability in China, it is manufactured in China and therefore cheaper than some brands as well. 

Honda is another popular brand, known for producing high-quality vehicles with excellent after-sales service. Toyota is known for producing reliable and long-lasting cars, and Buick is popular for its reputation as being more luxurious. 

However, prices for Buick vehicles are generally higher than other brands. 

Another good reason to choose a popular brand is that parts will be easier to come by and cheaper to fix at any local garage. 

These trends are on the decline though, as China’s domestic car market picks up and people scramble to buy electric vehicles.  

Buying an Electric Car

As we all know, China is dominating the world of Electric Cars right now. With BYD Auto, SAIC Motor, Great Wall Motor, GAC Group, Geely, and more throwing their hats into the EV ring. 

As part of China’s efforts to reduce pollution, they have been promoting the purchase of electric vehicles (EVs), implementing several policies and incentives to encourage the production and purchase of EVs.

They created an EV subsidy program which drastically reduced the cost of purchasing one of these cars but also may or may not come to an end in 2023. The Chinese government also developed laws that exclude EVs from certain taxes and registration costs, making them more affordable. 

China also streamlined the registration process for EVs. Unlike other cars, which must go through the license plate lottery system in some cities (see more on this below), EVs are often exempt. EV buyers can receive license plates more quickly and easily.

For a detailed look at what it is like to buy a Tesla in China, you can check out this article from our friends over at Managing the Dragon. 

Car Prices 

Cars are not cheap in China. But the price of imported cars has dropped significantly in recent years. Imported cars are subject to value-added tax, consumption tax (CT), and customs duties. These add up to about 25% to 70% of the car’s value depending on lots of factors, from country of origin to engine size. 

The taxes on importing foreign cars have been dropping consistently every year, however, and imported cars are much more affordable in China than in the past. In 2018 China cut import duties on vehicles from 25% to 15%. However, this does not apply to American cars as, in 2019, China imposed an additional 25% tariff on U.S. imports. 

Chinese made cars are usually a better deal than imported cars as they are taxed far less. Some Chinese brands of cars include Geely, Haval, Wuling, Changan, Baojun, Chery, BYD, Roewe, Great Wall, and so many more. 

Advertisement

Great Wall Motors are on the path to compete with Tesla, producing the most affordable electric vehicles in a range called Ora. They can be bought brand new for between 59,800 RMB to 77,800 RMB. 

Where to Buy a New Car

Authorized Dealerships are most peoples’ first choice when buying a new car in China. They are owned and operated by the car manufacturers or affiliated companies. They make the process easy, they guarantee authenticity and transparency (relative for China), and they hold your hand through the whole process demystifying the steps and showing you where to sign. 

You can find dealerships by searching the brand of car you are interested in on Baidu Maps (Google is basically useless in China). You can search in English, but it helps to have a Google Translate extension on your browser (Chrome is great for this) so that you can see real-time English translations as you search. For example, here is the location of a Honda dealership in Beijing. 

Online is now a legitimate option for buying a car in China. E-commerce platforms such as Tmall, JD.com, or Alibaba now have official car manufacturer online stores. Just make sure they are verified. For example, here is a dealership for BYD electric vehicles on Alibaba. 

Car Supermarkets are a thing in China as well. With retail brand Suning claiming to be opening over 100 car supermarkets all over China in the following years.  These supermarkets have multiple brands under one massive roof, making it easier to compare and choose between different models. 

Auto Shows are another place big spenders can go shopping for the latest car models in China. Here is a list of all the upcoming auto show events in China. 

Buying Process

The actual process for purchasing a new car in China is the same for Chinese people and foreigners. You just need a passport, valid visa, residence certificate, and a whole lot of money.  

The usual down payment on a new car in China can range from 20% to 50% of the total cost of the car depending on the car model, dealership, and financing provider. Some may ask for a higher down payment simply because you are a foreigner or have a limited credit history in China. You must have a lot of cash to even think about buying a new car in China. 

It is possible for a foreigner to get financing and pay for their new car with installments but the foreigner must have a valid residence permit or work visa, a Chinese bank account, and a good credit history. 

The process can be quite complex and time-consuming, we recommend having a Chinese agent (more on agents below) or professional colleague to help you. The paperwork will be mostly in Chinese and the Chinese version of any bilingual contract is the only valid one. 

Once you find the car you want, the dealer will walk you through the purchase paperwork and finance options. There are going to be four main types of paperwork required: 

The Sales Contract: outlines the terms of the sale, purchase price, payment method, delivery date, warranties, guarantees, extras. 

The Vehicle Purchase Invoice: Required for tax and registration purposes, this detailed invoice lists the make and model of the car, its price, and additional fees or charges. 

The Loan Agreement: If you require financing, you will need to sign a loan agreement that outlines the terms of the loan, interest rate, repayment schedule, and penalties for default.

The Insurance Policy: The dealership may offer to arrange car insurance for you, and you will need to sign a policy agreement if you choose to purchase it.

License First

Sorry to be the bearer of bad news, but that international license you have, or the valid license you have held for years in your own country is not going to give you permission to drive or register a car in China. 

You will be asked for your license as part of the car registration process and also often part of the car buying process. Without one, you will be slowed down at every stage and some hurdles will be unconquerable.  

China does not recognise any license other than one issued in China. There are exceptions to diplomatic staff and some others, but for us regular folks, we will need to go through the process of getting a Chinese driver’s license. 

In better news, it is not actually that difficult to get a Chinese driver’s license. It is a bit time consuming, but the process is clear and there are agents who can also guide you through the process if you want help. 

Once you have your license, you might want to practice by renting a car before making the big purchase. It is very easy to rent a car in Shanghai, in Beijing, or in most major Chinese cities. Becoming a confident and safe driver on new and unpredictable Chinese roads might take a bit of time, so let yourself adjust and go slow. 

Prepare Your Documents 

Make photocopies of your passport, visa, residence permit, and your driver’s license. You will then need the paperwork related to the car you have purchased including the official photograph of the vehicle, the certificate or purchase of tax or an exemption, the proof of origin of the vehicle; qualification certificate if a domestic brand. 

Registration Measures of Motor Vehicles in the People’s Republic of China documents required for the registration of a motor vehicle:

• Original and photocopy of passport of purchaser
• PRC driver’s license
• Original and photocopy of valid visa
• Residence permits dating back at least six months
• Residence registration certificates from PSB
• The official photo of the car
• The origin proof of the car
• The certificates of purchase tax payments

Buy Insurance

Insurance is a prerequisite to buying a car. Insurance can be obtained through your car dealership or from insurance companies, agencies, and independently owned insurance brokers. Check with your current or future insurance provider, or check with other auto insurance issuers for expats in China like PICC, Clements, or talk to Beijing Expat Service Center for more help. 

Register Your Car 

If you are in Beijing, Shanghai, Shenzhen, or Guangzhou the issuance of license plates is heavily restricted and you might be waiting a long time for your new plates. In these large cities you have to enter a lottery to obtain a license plate. You cannot register a car till your number is drawn. 

This began In 2011 when Beijing enforced a law where a maximum of 20,000 cars could be registered each month as part of the city’s effort to tackle its traffic problem. In Shanghai an Guangzhou, they are currently only releasing 10,000 plates per month. If you are in a smaller city, it might be easier and faster. 

Pay China Vehicle Purchase Tax 

You will first need to pay a 10% vehicle purchase tax at the State Taxation Bureau (国家税务总局) and collect the receipt from that. 

• Beijing State Taxation Administration: No 5 West Yangfangdian Road, Haidian District, 100038
• Shanghai State Taxation Administration: 200 Renmin Ave, Shanghai, 200003
• Guangzhou Local Tax Bureau: 3 Huaxia Lu, Zhujiang Xincheng, Tianhe District, 510623

Get to the Vehicle Administration Office 

Go with your new car to the vehicle administration office (车管所) in your city

• Beijing Vehicle Administration Department for Expats: Address: 18, East South Fourth Ring Road, Chaoyang District (near Shibailidian Bridge)
• No. 1 Branch Vehicle Administrative Office Shanghai: 2999 Huaxia Xi Lu, near Yanggao Nan Lu, Pudong District
• Guangzhou Traffic Police Department of Vehicles Motor Vehicle Registration: Pingbu Blvd Middle, Huadu District

You must first have your car inspected and receive the car inspection patch and inspection certificate.

At the same office you will begin the process by taking a number and presenting all the documents we have mentioned to the receptionist. 

Steps for car registration: 

• Pay vehicle purchasing tax at the State Taxation Bureau
• Buy Compulsory Traffic Insurance
• Go to your local Vehicle Administration Office (VAO) to get your car inspection patch and inspection certificate 
• At the VAO, hand in:
  • the receipt of purchasing your car
  • the tax receipt
  • inspection certificate
  • the receipt of your Compulsory Traffic Insurance
  • and all the personal identification documents listed above
• Fill in the application form
• Wait for license plates  

Costs to include in the purchase of a new car in China: 

• The car ticket price 
• Road tax
• Appraisal tax
• User tax 
• Emissions test fee
• Registration fee
• Insurance
• License plates

If you are in a small city: 

You will fill in an application form and choose a license plate number from a list. You can have your license plates mailed to you or you can collect it in person. Have a Chinese address ready for this. Your final plates could take a month or more to arrive depending on your city. 

You can apply for a temporary plate at this time. You will receive paper plates, usually valid for one month to display in your car windows.

If you are in Beijing, Shanghai, Shenzhen, or Guangzhou: 

Your car is going to have to be stored somewhere safe while you wait for your license plate. This could take months or even years. 

Be prepared for this and know that there is nothing you can do if you want to drive in these major cities. You just have to wait for your number to be called at random or you can pay exorbitant sums to buy one of the plates the government sells in an auction which go for up to USD$15,000. 

Electric Vehicle Exceptions – Green Plates

China is recognising the environmental benefits of promoting the sale of electric vehicles to combat their air pollution problems. As a result, foreigners will have an easier time buying an E-Vehicle as far as getting a license plate. Here is an article of a first-hand experience of a China expat buying and registering his electric vehicle. 

China has introduced Green Plates. These are not restricted in the same way as traditional blue license plates are. They are issued for free, as long as your vehicle meets the strict green requirements of an electric or hybrid vehicle and your driving record is spotless. 

Finance Options

Car financing is available to foreigners who have lived in China for at least one year. You can apply for a personal car loan at a bank. You can go with the bank where you hold an account or at a new bank. All of the major Chinese banks have information in English about the auto loan application: China Merchants, China Construction, ICBC, Bank of Beijing, and Bank of China. You can also apply for financing at the dealership and they will help you with the process. 

Advertisement

To choose a car dealership, you will first want to have an idea of the brand of car you want. For example the Beijing Dashixing Auto specializes in Cadillac, Chevrolet, and Buick. LSH Auto in Beijing is the place to go for Mercedes-Benz, AMG, Maybach, Denza, and EQ. You can find the nearest dealership of the car brand you want near you in your map app.  

Maintenance

When you own a car in China, you will have to perform a yearly maintenance registration check.

This will happen at the Vehicle Administrative Office where you registered your car. You would be wise to use an agent to do this for you to avoid the day spent in the government office dealing with bureaucracy. 

For regular car maintenance, most people will either go back to the dealership where they bought their new car for servicing or just visit a local side-of-the-road shop. Many petrol stations have mechanics on hand for oil and tire changes. All the big brands can be seen around the cities; Bridgestone, Goodyear, and Dunlop dominate the market. 

To find a cheap local mechanic in China, you can look for signs that say “car repair shop” 汽车修理店 (qì chē xiū lǐ diàn) or 汽车维修店 (qì chē wéi xiū diàn). To ask for a “mechanic” in Chinese you say 汽车修理工 (qì chē xiū lǐ gōng). 

Some local mechanic chains include: 安吉之星 (Ān jí zhī xīng) – Anji Zhixing, 途虎养车 (Tú hǔ yǎng chē) – Tuhu Car Service, and 中意汽车 (Zhōng yì qì chē) – Zhongyi Auto. 

Car Bureaucracy Agents 

Once you are in China, you will be invited to join all kinds of WeChat groups. These are not searchable and can only be accessed through friends recommending and inviting you. There are groups for everything. 

Ask colleagues and friends about groups that are for foreigners who own cars. In these groups you can find mechanic suggestions, door-to-door maintenance services, and agents for yearly registration checks. 

Because of the insidious nature of WeChat and mobile apps, most Chinese companies these days do not even bother having a website. Some expat classifieds sites like the Beijinger and SmartShanghai are also good places to find such agents, advice, and assistance. 

In these expat sites and groups, you will find agents who act as jack-of-all-trade problem solvers for foreigners in China. They are usually very savvy and have connections in government offices to help them skip queues and get tedious things done with little fuss. They will cost you a bit extra, but they are often well worth it. They usually do visas and drivers licenses, but can also do car registration, business registration, and other things. 

You can see examples of these kinds of companies here with Beijing-LEEO and Beijing Ex-pats Service Co. Trust us when we tell you that having a good relationship with one of these experienced and entrepreneurial agents is a wise investment for China troubleshooting. 

Now, on to You 

That’s it! Once you have finished with all these steps, you can legally drive. Just make sure you do it safely and give yourself time to get used to the different driving conditions in China. You might need some tips and tricks for handling China’s roads and driving styles, but as a car owner you will be blessed with the freedom and flexibility to make China really feel like home.