Focus

Car leasing races into overdrive

By Shen Jingting (China Daily)
Updated: 2010-07-26 15:48

The parking lot of a car leasing company in Beijing. Renting a car has become increasingly popular among Beijingers, especially young people. [Wang Jing / China Daily]

Renting or leasing a car has become increasingly popular among Beijingers, especially young ones, traveling, picking up friends at the airport or going on business trips.

Unlike foreign countries, such as the United States, where the car rental businesses has flourished for decades, the idea of leasing or renting a car in China has only really caught on since 2007.

"The first time I rented a car was in Xi'an two years ago. I was on a business trip and one of my friends came to visit me, so I rented a car to pick him up at the airport and took him for a little trip in Xi'an," Li Xinghua, a professor at Beijing University of Aeronautics & Astronautics, told METRO.

Li said the three-day rental cost is about 700 yuan. He said the price was reasonable, since he was able to enjoy his friend's visit much more than he would have if he had spent much of it sitting in buses and taxis.

"I told all my friends about it and they all thought it was a good idea. I think this (renting cars) might be a trend," Li said.

Zhao Xiaocheng, 26, is a sales manager in the real estate industry. He was considering buying a car for daily transportation, but he gave up the idea after he started leasing a Buick Excelle in August last year.

"I have leased the car for more than seven months now. At present, I don't have plans to buy my own car," Zhao said.

He said leasing saves a lot of worry and headaches, because now he does not need to get repair work done if an accident occurs.

"Just dial the 24-hour hotline and ask the car leasing company to drag it away," Zhao said.

Another advantage of leasing is that you don't need to pay 200,000 yuan at once, he added. But those wanting to rent or lease cars in Beijing are constrained by the still relatively small number of car rental and leasing companies and the higher price of renting a car compared with using public transport.

Zhou Hongping, manager of the Shaoyaoju and Wangjing outlets of China Auto Rental Ltd, said her company keeps adding new cars, but supply still falls far short of market demand.

A young man rents a car from a car leasing company in the capital. [Sun Jun / for China Daily]

"On holidays such as Labor Day and National Day, it's common for people to be unable to get a car. Sometimes, it even happens on regular weekends," Zhou said.

She said in her stores, employees often process at least 20 orders per day. While in the company's hot spots, such as Guomao and Shuangjing, the figure is twice that.

Although car rental companies are hurriedly setting up branches across the country, many people say the number of car rental outlets is far from adequate.

"The networks should be expanded, because in relatively small cities, it's hard to find car rental services. Even in Beijing or Shanghai, you often can't find somewhere close by to rent a car," said Xiao Qi, a woman in her 30s.

Even if people can find a place to rent a car, it doesn't come cheap, at least not in Beijing. Renting a new Chevrolet Lova, for example, will usually cost 218 yuan a day.

Drivers will need to pay an additional 20 yuan a day for insurance.

The deposit for renting varies from 3,000 yuan to 10,000 yuan per car.

"I have read some news reports that say in the future, renting a car may be cheaper than buying a car. But I really doubt it," said Zhang Ming, who works at Sohu.com and sometimes rents a car when he is on a business trip.

"At least for now, I don't see any possibility that renting is more economical than buying," he added.

Foreigners wanting to rent a car in Beijing face the additional obstacle of needing a Chinese driving license.

"The only choice they have, unless they want to try getting a Chinese drivers license, is to hire a local driver along with renting the car," said Zhou Hongping.