[GTO]

Tata introduces an industry first; Customers can now swipe their credit card and drive out in a Tata Nano on the same day. These customers can also convert the entire amount in monthly installments at 0% interest, over a period of 12 months, at an EMI of Rs. 8,333 per lakh.

The Nano has partnered with five banks for this scheme - Axis Bank, HSBC Bank, ICICI Bank, Kotak Mahindra Bank and Standard Chartered Bank. Customers who have credit cards from these banks can avail of the special scheme in 26 cities, across 75 Tata Motors Dealerships.

According to Mr. Ranjit Yadav, President, Passenger Vehicles Business Unit, Tata Motors, “This offer will enable customers to own a car in the fastest and hassle free manner. With the introduction of this offer, consumers get the benefit of converting the entire amount on the credit card into interest free installments, spread over a period of 12 months and manage the monthly cash flow better.”

Link : Tata Nano Official Review

[parrys]

A good move by Tata IMO to keep the ball rolling for the cheapest car in the world branding disaster.

The only question I have is what about the hidden costs, example processing fees charged by credit card companies / banks every time you convert a transaction into an EMI.

Will this be all inclusive? Or insurance, road tax etc. will be in cash?

The campaign might find a few customers who will be lured by the 0% Interest factor but the processing fees might come as a shock.

[aroop]

Originally Posted by GTO

Tata introduces an industry first; Customers can now swipe their credit card and drive out in a Tata Nano on the same day. These customers can also convert the entire amount in monthly installments at 0% interest, over a period of 12 months, at an EMI of Rs. 8,333 per lakh.

Link : Tata Nano Official Review

I think its a good move. No hassles of documentation etc, since the bank issuing the credit card would take care of the creditworthiness of the customer. Any default in EMI payment would automatically translate to exorbitant interest rates which come with the credit card.

The cost of loan (ie the interest component which banks will forfeit on account of 0% interest) would probably be borne by Tata Motors.

If 'Swipe and drive out' is really the mantra, it also implies that there are too many nanos lying with the dealers waiting to be sold.

In future, we might see similar schemes for some slow movers as well.

[pganapathy]

Assuming they have worked out a good deal with the banks and there are no hidden costs, this has the potential to reinvigorate their sales. Sad that they can't stretch it to other vehicles in their range

[Warwithwheels]

How many of the credit card companies provide such a generous credit limit to the salaried class?

[Abhi_abarth]

This is surely lucrative but as parrys said need to watch out for the processing fee. Moreover, not sure if people are ready to go ahead when you have the face-lift model going through the tests.

Hope it helps TML

[Viju]

This move comes a week late for me I guess! Last week, when we were paying the full amount for my wife's Nano LX, there was problem in doing an account transfer. We were ready to swipe the credit card, save for the 2% processing fee (4500/- for the 2,50,000/-). So we waited another day to do the account transfer.

I wonder if they have waived the processing fee in this scheme!

[safari_lover]

Originally Posted by parrys

The only question I have is what about the hidden costs, example processing fees charged by credit card companies / banks every time you convert a transaction into an EMI.

The processing fee would be a one time charge and may not be substantial compared to the benefits of easy EMIs. For ex. I swiped my card for 75K recently with 6 EMIs options at 0% interest. The fee charged was ~1000Rs.

Not many people would have credit card limits of 2L, but most of them would have multiple cards. May be they could make use of more than one card and of course, there would be the added benefit of reward points from the transactions

[ACM]

Good Scheme

Could Help the Nano.

The Rewards Points would be like an added benifit / discount. If there is indeed no processing fees then it makes superb logic, but if there is a processing charge then the points advantage would more or less get nullified against that.

Again I guess we are implying there is no transaction charge as well. Else that is another 1.25-2.1% down the drain.

[k2max6]

When we can buy LCD TV's costing over 2 lakhs in emi at 0% then why not a Nano . A great move IMO.

But the point in case is how many nano buyer's would be having such credit limits.

It would be great if other car manufacturers also introduce such schemes.Kind of instant car loan via credit cards. No frills loan.No waiting.

Even if 2% is charged, it hardly matters when you are getting interest free loan.

[ghodlur]

Quite Innovative option bought out by Tata Motors and an apt one considering the present situation they are in right now. Also considering the fact that there have been too many credit card frauds coming to light, would this be an good alternative?

Would any collateral be needed by the CC company before they can sanction this option? This is an industry first (IMO) and needs to be verified thoroughly before it can be accepted as viable.

[sa_kiran]

Now the car has become a true commodity :-) I hope that it really picks up and families struggling on dangerous bikes move to Nano (or other safer cars).

[parsh]

What a really Nano'vative idea Tata! This may really work out well for quite a few people.

I remember, when I got my car loan. A single call to ICICI Cards division asking for it, them checking my records in few minutes and within minutes it was sanctioned without need to do any paper-work and round trips of the bank at all, they just issued me a reference number to tell dealer and whew it was through sitting pretty at my place. However, that did not convert into EMIs on my card but to PDCs on the savings account linked to it.

[akhilesh51]

There seems to be one catch:

The entire amount needs to be repaid within a year. Even with the low price, this will still translate to 10,000+ EMI for its buyer.

That will take this vehicle out of reach of anyone earning less than atleast 30K per month, a salary at which people start to aspire for a relatively plush vehicle in range of 3-5L.

This scheme is only good for customer who wish to part-pay (50-60%) in cash and convert the rest of amount in EMI without having to go through the hassle of loan formalities. A good option for metro towns where a nifty hatchback is required within the family of 4 and income around 50K per month.

In case of cash-strapped buyer looking for finance, I really think this is not even an option.

[Mudhalaipatti]

On paper looks good. How many have such a high credit limit on their cards. For those who indeed have 2L credit limit on their cards, would they be buying a NANO.

Perhaps, this scheme is intended for those who have 50% cash and wish to swipe their card for the remaining 50%, with out getting in to the hassle of car loan processing.

However 0 interest scheme, with no hidden charges appears too good to be true.