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Old 10th April 2016, 09:46   #31
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Default Re: Zoomcar Associate Program (ZAP) - Lease a car to Zoom!

Given my experience in the space. A few points.

1) Resale value after 3 years of fleet usage will be in in the 30-35% range. You can check this with your local second hand shop.
2) yellow board cars are easy to sell. There are always cabbies who want to buy. Especially Maruti's. Don't even think about using the car yourself at the end of the tenure.
3) treat this is a pure financial investment. This includes other financial alternatives available to you.
4) maintainence cost per km seem to be tad low @80p. I would put it at about 100p. Maybe even 135p at the later stages of ownership.
5) I saw a 57% utilization rate to be profitable. This number is quite optimistic.

Please treads with caution.
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Old 10th April 2016, 09:48   #32
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Default Re: Zoomcar Associate Program (ZAP) - Lease a car to Zoom!

That is a good point. I think this is a business with low entry barrier. ( especially in this age of reckless private equity funding for fancy new things). Some one could easily start a 100 % asset light model by aggregating cars.
If I am not wrong, in general the transport related business is not lucrative. Plus there there hassles like accidents etc.
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Originally Posted by smartcat View Post

Along with watching your cash flows from the investment, one needs to keep an eye on how Zoomcar is doing financially. Ask for their P&L or get it from Registrar of Companies - especially if significant investment is involved. An investor should also keep an eye on the competition. If 10 players (backed by Private Equity obviously) get into the business, it will significantly affect Zoomcar.
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Old 10th April 2016, 10:18   #33
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Default Re: Zoomcar Associate Program (ZAP) - Lease a car to Zoom!

Today, as of now, I am not finding a SINGLE Zoomcar across Bangalore in any location for the whole day. That itself is a show to the demand which they have on weekends. Taking this into account, their calculations are pretty legible. Firstly, the current fleet is aging and as per their tenure of 30 months, quite a few cars from the initial batches will be disposed. So they need more cars. Moreover, for the weekends, demand is already sky high. Hence, there wont be a loss incurred, if not profits.

Now trying to find a scheme where we use the car on weekdays and they use it on weekends. Let them just share the revenue earned on the weekends

Last edited by audioholic : 10th April 2016 at 10:20.
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Old 10th April 2016, 12:51   #34
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Default Re: Zoomcar Associate Program (ZAP) - Lease a car to Zoom!

I played around with different variables to create different scenarios and here is what it results in for Swift LDI. The variables i changed are in "Yellow". I assumed that VAT, Usage kms/mth & Blended hourly price remains constant during the tenure. Note that it doesn't let me change the Tenure to any value less than 30.

All i tried to do was see the impact to total cash flow with change to some key parameters. I've my doubts now.
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Zoomcar Associate Program (ZAP) - Lease a car to Zoom!-zap-swift-ldi-scenario.jpg  

Attached Files
File Type: xlsx ZAP Returns 20160408 - Associate_Scenarios.xlsx (27.5 KB, 545 views)

Last edited by Nilesh5417 : 10th April 2016 at 12:54.
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Old 10th April 2016, 13:21   #35
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Default Re: Zoomcar Associate Program (ZAP) - Lease a car to Zoom!

Quote:
Originally Posted by GTO View Post
How did you arrive at the 57% number?
The 57% break-even figure means that the car will have to be run for atleast 412 hours/month out of a total 720 hours (24*30). Also, I understand that it will be impossible for a car to be run the entire 24 hours, so the max figure should be around 18 hours/day. If its considered to be 18 hours/day, the utilisation for 412 hours/month turns out to be 77%.

In essence, the car will have to be run for 412 hours/month to break even considering the all the payouts. The following table will gives the scenarios needed on the basis of the number of hours run/month:

Name:  ZAP Comparison.jpg
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Old 10th April 2016, 20:44   #36
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Default Re: Zoomcar Associate Program (ZAP) - Lease a car to Zoom!

Quote:
Originally Posted by Nilesh5417 View Post
I played around with different variables to create different scenarios and here is what it results in for Swift LDI. The variables i changed are in "Yellow". I assumed that VAT, Usage kms/mth & Blended hourly price remains constant during the tenure. Note that it doesn't let me change the Tenure to any value less than 30.

All i tried to do was see the impact to total cash flow with change to some key parameters. I've my doubts now.
The 48 month tenor assumption is a non starter. The car will be finished in much less than that.
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Old 11th April 2016, 12:47   #37
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Default Re: Zoomcar Associate Program (ZAP) - Lease a car to Zoom!

Zoomcar includes fuel cost in the rental. Then why is fuel charged to the owner of the car?

or have I understood wrongly?

Can someone explain?
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Old 11th April 2016, 14:09   #38
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Default Re: Zoomcar Associate Program (ZAP) - Lease a car to Zoom!

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Originally Posted by Karthik Chandra View Post
Zoomcar includes fuel cost in the rental. Then why is fuel charged to the owner of the car?

or have I understood wrongly?

Can someone explain?
Fuel is included in the cost of the rental for the customer. However, zoomcar will be filling up the car right? So they are charging the fuel on you, or to be more precise, since its a 70:30 revenue sharing, even fuel costs will and should be shared that way. If not, then there is a flaw in their proposal.

The fuel thing is something that we must be concerned about. None of the cars are driven in a FE oriented manner and this will make a huge change in the running costs of the car. As shown in the previous posts, if the mileage of the car and fuel prices change to the worser side, then our returns will take a proper hit.
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Old 11th April 2016, 14:50   #39
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Default Re: Zoomcar Associate Program (ZAP) - Lease a car to Zoom!

I have a simple maths. The On-road price of say Ritz LDi here in Bangalore is about 6.1 lacs(No full time road tax since Yellow Board registration).
Now as per Zoomcar ideal scenario, savings per year is 90K per annum.
Lets say I go by 30 month contract, my earning is roughly 2.3lacs.
If I sell the car after 30 months I am pretty sure I wont get more than 4lacs!

Effectively after 30 months I have 4+2.3=6.3 lacs in my hand. Again the 2.3lacs is income before tax.
Comparing this with 6.1 lacs I invested about 30 months back, Is it not loss when compared with bank interest?Am I missing something here?
Car is a depreciating asset, however with this scheme you can avoid depreciation but at the same time you wont be enjoying the benefits of owning a car.
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Old 11th April 2016, 15:56   #40
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Default Re: Zoomcar Associate Program (ZAP) - Lease a car to Zoom!

I received their FAQ and the excel sheet. I worked on Swift LDI but the numbers dont entice. This inspite of choosing to self fund the car, without taking any loans. As per the sheet I would be incurring an upfront cost of Rs.620,000. Lets compare it with the most conservative investment option, bank fixed deposit.

If I am in the highest tax bracket and interest rate @8% p.a effective rate would be approx 6.5% after all income tax deductions. If I put Rs.620,000 in a bank for a period of 30 months @6.5% p.a, I can expect a minimum interest of 40300 p.a. That translates to Rs.3358 per month and Rs.100740 for 30 months (I have not included the compounding effect)

So basically at the end of 30 months I would have Rs.620,000 + Rs.100740 = 720740

Now lets take a conservative example for Zoom,

40% resale value
Fuel rate - Rs.56
Servicing and maintenance - Rs.1 per km
Mileage 15/L
Blended hourly rate - Rs.100 (their lowest being Rs.80 and on weekends Rs.120, so I took the average)

Avg No of hours customer hires per day - 24 (thats a highly exaggerated number)

Avg no of days the car is available in a month - 30 (although it should be around 25 as car may be unavailable due to service, repairs, etc)

Even after I input the above parameters which are reasonable I guess, I stand to get Rs.658,028 at the end of 30 months !!!! Thats almost 10% less than a FD and effective ROI of approx 6% This when the car is running for full 24 hours for 30 days which is near impossible. In case you take even 16 hours per day, the return drops to 0% With a 90% loan component the sheet shows a return of -79% !!!

Did I miscalculate or we are been taken for a ride???
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Old 11th April 2016, 17:46   #41
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Default Re: Zoomcar Associate Program (ZAP) - Lease a car to Zoom!

Hi,

I got confused when I thought:

If I am taking the loan and buying a new car, paying insurance, permit and road tax every year and also paying for petrol and maintenance....

Then why I cannot pay for a driver? Is it costlier than the returns offered by Zoom Car?

Sorry if I did not consider any point..
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Old 11th April 2016, 19:31   #42
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Default Re: Zoomcar Associate Program (ZAP) - Lease a car to Zoom!

Quote:
Originally Posted by livetodrive View Post
Hi,

I got confused when I thought:

If I am taking the loan and buying a new car, paying insurance, permit and road tax every year and also paying for petrol and maintenance....

Then why I cannot pay for a driver? Is it costlier than the returns offered by Zoom Car?

Sorry if I did not consider any point..
Customers & Infrastructure are the key, along with the Brand. Zoom provides them all and therefore the charges.
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Old 12th April 2016, 20:24   #43
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Default Re: Zoomcar Associate Program (ZAP) - Lease a car to Zoom!

Interesting proposal. Surely worth a look.

My 2 cents. Which I did not see above.

01. Any "rental" is 30% tax deductible (a in rental income from office spaces or houses)
02. Depreciation is tax deductible = rebate
03. Re-sale of an asset for which you have already taken a tax deduction, sounds OK to me.

In the light of the above, the proposal may be even more attractive. Given that my points are valid in this car lease scenario


Someone pointed out that the aggregator (Zoomcars) is charging an unfair or high % of revenue. Given the services they are offering & the whole business model wherein the lessor has next to ZERO hassles / management - I think it is fair. Just to put things in prespective. Ola is charging 20% & doing far less than Zoomcars says it will

Last edited by Ricky_63 : 12th April 2016 at 20:27.
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Old 14th April 2016, 23:57   #44
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Default Re: Zoomcar Associate Program (ZAP) - Lease a car to Zoom!

Quote:
Originally Posted by audioholic View Post
The fuel thing is something that we must be concerned about. None of the cars are driven in a FE oriented manner and this will make a huge change in the running costs of the car. As shown in the previous posts, if the mileage of the car and fuel prices change to the worser side, then our returns will take a proper hit.
True. Is the FE put out in the excel sheet a constant on which fuel cost is calculated (based on the kms run and this constant) OR will the fuel be charged on the owner on actuals? The middle men who run the business at a zoomcar outlet are responsible for filling up the tank and cleaning the car before each ride. Can we be sure that no malpractices are done by these guys while re-filling?

And about the service cost, is that just billed to the owner or that the owner need to arrange to get it serviced? Guess the service rates are also actuals than fixed.
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Old 15th April 2016, 15:43   #45
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Default Re: Zoomcar Associate Program (ZAP) - Lease a car to Zoom!

Quote:
Originally Posted by Ricky_63 View Post
Interesting proposal. Surely worth a look.

My 2 cents. Which I did not see above.

01. Any "rental" is 30% tax deductible (a in rental income from office spaces or houses)
02. Depreciation is tax deductible = rebate
03. Re-sale of an asset for which you have already taken a tax deduction, sounds OK to me.

In the light of the above, the proposal may be even more attractive. Given that my points are valid in this car lease scenario


Someone pointed out that the aggregator (Zoomcars) is charging an unfair or high % of revenue. Given the services they are offering & the whole business model wherein the lessor has next to ZERO hassles / management - I think it is fair. Just to put things in prespective. Ola is charging 20% & doing far less than Zoomcars says it will

All the tax deductible aspects works only if you are doing this investment not as individual but as a registered entity.
If investing as a company/firm there will be no loan/financing.

This entire thing will turn negative because future income is lesser than fixed income. If anyone wants tax free returns with decent risk, put money in mutual fund hold it for longer than 36 months you can expect 12% tax free returns. How abt that.

The entire scheme is sounding like OPM (other peoples money), let others bring money, Zoomcars gets the cars for free, makes money and owners of cars are left with fast depreciating assets.

The main reason behind Zoomcar bringing this scheme is to lower the working capital required.
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