What Foreigners Need to Know About Buying a Car in China?

  

Source: OT-Team(G), 人民网

 On December 7, People's Daily published a Q&A regarding the legal considerations for foreigners purchasing a car in China. 

  The question was posed by Elia (a pseudonym), a foreign resident working and living in China, who plans to buy a private car for easier travel. Elia asked about the legal matters foreigners should be aware of when buying a car in China.

Lawyer's Response:

  In general, foreigners need to pay attention to several key issues when buying a car in China, including eligibility for vehicle registration and license plates, whether a Chinese driver's license is required, and the possibility of applying for car loans. Here's a breakdown of the key points:

1. Confirm Eligibility to Purchase a Car

  Purchasing a car involves a series of registration and licensing procedures. Therefore, foreigners should first confirm whether they meet the conditions for buying a car in their specific city. Although policies vary by location, the general requirements include:

(1)Valid Identification: This could be a passport, visa, residence permit, or a permanent residence card.

(2)Tax Payment Records: Proof of continuous personal income tax payment for a specified period.

(3)Valid Driver's License: Foreigners must possess a valid driver's license issued by the local traffic authority. It's advisable to check with local departments for specific details.

  Important Reminder: Foreigners should ensure that their identification documents are valid, as expired documents may hinder the purchase process.

2. Check if the City Has License Plate Restrictions

  Several Chinese cities impose restrictions on vehicle license plates. For instance:

(1)Shanghai: Non-commercial vehicle license plates are awarded through an auction system.

(2)Beijing: Vehicle purchase quotas are allocated via a lottery system. The quota is valid for 12 months, and individuals or entities must complete vehicle registration within this period. If registration is not completed within the given time frame, the quota is automatically forfeited.

  Foreign buyers should check whether their city imposes such restrictions and what specific procedures apply.

3. Retain All Relevant Documentation

  After purchasing a car, it's important to keep all related documents, including the purchase invoice, quality certification, and proof of tax payment. These documents are necessary for vehicle insurance claims and registration.

  When registering the vehicle, the buyer will need to provide documentation such as the vehicle's origin certificate, a quality certificate, proof of vehicle purchase tax payment, or tax exemption documents. It is recommended that these documents be prepared and kept in advance.

4. Can Foreigners Apply for a Car Loan?

  Foreigners are eligible to apply for a personal car loan in China. According to the "Automobile Loan Management Regulations (2017 Revision)", foreigners who have lived in China for at least one year (including Hong Kong, Macau, and Taiwan residents) are allowed to apply for a car loan.

5. Do Foreigners Need a Chinese Driver's License?

  Foreigners holding a valid overseas driver's license may apply for a Chinese driver's license under certain conditions. According to the "Regulations on the Application and Use of Driver's Licenses" (Ministry of Public Security Order No. 162), foreigners who have held a foreign driver's license for at least one year and have resided in the issuing country for more than 90 days in the past year can apply for a Chinese driver's license for the corresponding vehicle type.

  The required documents include:

(1)Identity Proof: Such as passport or residence permit.

(2)Medical Certificate: Issued by a medical institution confirming the applicant meets the physical requirements.

(3)Foreign Driver's License: If the license is not in Chinese, a translation or notarized translation is required.

  For foreign embassy or international organization staff in China, the process follows the principle of diplomatic reciprocity.

  As car purchase policies in China may change at any time, it is advisable for foreigners to thoroughly prepare and stay updated on the latest regulations before buying a car. This will help avoid unnecessary delays and ensure a smooth purchasing process.