China plans to ban car resales within six months of registration to stop “zero-mileage” scam

China is considering imposing a ban on the resale of newly registered vehicles, caused by chronic overcapacity and intense price wars within the nation’s EV market, which is pressuring automakers to pursue extreme tactics to survive, including fraud.

China’s Ministry of Industry and Information Technology is considering a six-month embargo on the resale of newly registered vehicles, which many see as a big swing to stamp out the practice of “zero-mileage used car” sales.

The potential crackdown, which was reported by Auto Review, a publication affiliated with the China Association of Automobile Manufacturers (CAAM), is Beijing’s first concrete response to the long-standing issue in its highly competitive car market.

China is considering a six-month ban on car resale

The zero-mileage phenomenon refers to vehicles that are technically classified as used, despite never having been driven or transferred to actual buyers. Automakers and dealers achieve this by registering cars and insuring them before final sale, allowing them to meet aggressive internal sales quotas and report stronger performance figures.

The measure, if implemented, would prevent any vehicle from being resold within six months of registration, curbing the manipulation of insurance and licensing data to record inflated sales.

The issue gained national attention in May after Great Wall Motor’s CEO, Wei Jianjun, publicly criticized the scheme. The Communist Party’s People’s Daily also ran an editorial last month condemning the sale of zero-mileage used cars.

China’s cabinet recently pledged to increase its supervision of the domestic auto market. According to Auto Review, automakers, including BYD and Chery, are now considering penalizing dealers who engage in practices like pre-licensing unsold vehicles.

The China Automobile Dealers Association has also proposed a code system for tracking used car exports, which could further limit abuse of the policy loophole.

Zeekr and Neta face accusations of inflating sales with pre-insured cars

New revelations from Reuters also exposed how two Chinese electric vehicle brands, Zeekr and Neta, booked tens of thousands of sales using the pre-insurance tactic.

Neta, owned by Zhejiang Hozon New Energy Automobile, pre-insured over 64,000 vehicles between January 2023 and March 2024, which accounts for more than half of its reported sales during that period.

In many cases, buyers were unaware that the insurance had already begun and only discovered the discrepancy when the insurance policies expired sooner than expected. The dealers are claiming they were pressured to move the inventory and explain away early-expiring traffic insurance as “complimentary.”

The strategy reportedly began in late 2022 and continued well into 2024, even as the company’s finances deteriorated. Neta’s parent company entered bankruptcy proceedings last month, and first-quarter sales for 2025 plunged to just over 1,200 vehicles.

Zeekr, a premium EV brand owned by Geely Auto, similarly recorded inflated year-end sales in 2024 with the help of its state-owned dealership partner, Xiamen C&D.

Data showed that out of the 2,737 cars “sold” in Xiamen that month, only 271 were actually registered for license plates, which is a necessary step for delivery to real buyers.

The buyers reported being lured into purchasing these cars with discounts and promotional offers. One Zeekr customer said a salesperson promised a 3,000 yuan discount and a 10,000 yuan charging coupon, but the car came with a pre-existing insurance policy registered under Xiamen C&D.

Zeekr has denied the state media reports, while Neta and Xiamen C&D did not respond to inquiries.

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