Instead of buying a car and making an upfront down payment, a customer can now subscribe to one and pay a monthly rent and enjoy the car for a tenure period.
Maruti Suzuki India Limited on Thursday launched such a programme in the city in partnership with Quiklyz by Mahindra Finance.
The programme allows the customer to opt from a range of new Maruti Suzuki vehicles for multiple tenure options for a fixed monthly rental.
The vehicles on offer include ten models from Maruti’s Arena and Nexa range including Ertiga, Swift, Celerio and Baleno.
A Swift Lxi will be available for a subscription of Rs 13,399 per month for a tenure of five years while a Vitara Brezza will have a charge of Rs 18,399 per month for a similar period. The subscription charges vary depending on the distance a car is likely to cover in a year and also on the tenure of the subscription which ranges between 24 and 60 months, said Turra Mohammed of Quiklyz.
Other companies also offer subscription programmes through Quiklyz in the city, including Hyundai, Mahindra and Mahindra, Tata Motors, MG, Kia Motors and
others.
The monthly rental includes vehicle usage charges, registration charges, maintenance, insurance and other common services related to vehicle usage. What it does not include are fuel, toll and traffic violation charges, said Turra. Once the tenure is over, the customer has an option to switch over to a new car or avail the option of purchasing the subscribed car.
The service also offers the customers the option of foreclosing the subscription at any point in time.
Vehicle subscription is a common practice in many countries. During the pandemic, it has caught up in India too where 25 per cent of car users wanted to rent rather than buy a car, said Shashank Srivastava of Maruti Suzuki India. “They are mainly urban, young people who want an asset light usage,” said Srivastava.
With the pandemic rose the need for personal mobility as opposed to shared mobility and mass transit. “Everyone wanted a safe journey but not everybody can afford a down payment,” pointed out Srivastava.
There are three types of customers for subscription. The elite look to subscribing for luxury cars of different brands, then there are the corporates and professionals, those with transferable jobs or are consultants who need a vehicle at the place of work and would like to use it and return it before moving to another city. Also, there are the aspiring millennials with no finance history, who have a new job and are not keen to take loans with high down payment.
Leasing is a big segment in the US where it comprises 30 per cent of the auto market, in Europe it is 25 per cent and in India its is two per cent. While a lease period is generally of four to five year, subscription tenures are shorter from 12 to 48 months.