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Old 16th September 2019, 09:20   #16
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Default Re: Mahindra launches car subscription service

Guess this works for the folks who keep moving from city to city every 2-4 years. Carrying your own car around states attracts a lot of hassle like NOC,road tax,re-registration etc and if you don't know the local language its almost a nightmare(personal experience in transferring bike & car). This way they can simply subscribe for a car they like and use it for their tenure in the city. Yes, it will turn out expensive compared to actual ownership but for transferable job holders transferring car from state to state as well is an expensive affair until we get One-Nation-One-Tax implemented(if at all).

But what's strange is they haven't offered automatic options for anything till XUV5OO. This model is likely to work mostly in tier-1 cities like Mumbai, Bangalore, Delhi etc and the primary requirement nowadays is AT transmission. Is this just a stock clearance move?

Last edited by SoumenD : 16th September 2019 at 09:31.
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Old 17th September 2019, 11:06   #17
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Default Re: Mahindra launches car subscription service

I just booked the Hyundai subscription service (the monthly one, something they call Switch) via Revv. I just relocated to India / Bengaluru and for now unsure of what car to buy (or even to buy) It helps folks who
1. Unsure which car
2. Unsure how long in a city/country
3. Need different cars for different usage cases - Im planning to get XUV / Venue for longer out of station drives.
4. In general likes to have options and do not want to stick to one for long (no I'm not a millennial :-)

S
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Old 17th September 2019, 13:15   #18
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Default Re: Mahindra launches car subscription service

AFAIK for the cabs with black on yellow number plates, the speed governors can be disabled. I have had conversations with multiple cab drivers regarding this. Speed governor is mandatory to get the car registered. Once this is done, they disable it from FNGs. As per their statements, it's just a matter of disconnecting a cable. They connect it again before handing over their cars for servicing (not sure why, I am guessing it would affect the warranty in some way).
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Old 17th September 2019, 17:14   #19
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Default Re: Mahindra launches car subscription service

Quote:
Originally Posted by Reinhard View Post
Primarily a measure to get stocks moving IMO. Without footfall at the showrooms ready to spare 1.5 million rupees, this is a very good initiative. If they keep the rates sensible, it makes a lot of sense. At the mentioned price in the advert of 31230 per month for a Scorpio, one will pay something around 15.5L in 4 years (and something more in form of hidden charges with *) Thats around the asking price of the car right now. So at the end of those 4 years - if they ask for about 1.5 to 2L from the customer to transfer ownership - it will make absolute sense. Anyway that would be lower than the loan interest paid during that time.

.
What is not shown in the Ad is the additional "Insurance & routine maintenance Rs 6,090/month".

From their website::

Settlement charge if you acquire this car are a bit high:
At the end of 12 Months
Rs 10,16,900
At the end of 18 Months
Rs 9,08,700
At the end of 24 Months
Rs 7,96,300
At the end of 36 Months
Rs 5,72,800
At the end of 48 Months
Rs 3,04,200

As per my calculations, based on 9.5% interest rate, for a W5 XUV, taking a loan might work out to be cheaper.


Quote:
Originally Posted by tarik.arora View Post
If we start seeing these lease options purely from a financial point of view, they don't make sense at all. Firstly, the monthly subscription cost attracts GST (18% i guess) and secondly, these are yellow-black plates, attracting state taxes. I am not sure if an individual can get tax benefit with private lease.

My frame of mind: I don't need to see the calculations to tell some one that Lease will always be costlier than owning, as the party offering lease will have its own margin in between.
Quote:
Originally Posted by Dry Ice View Post
Good initiative, but the devil is in the details.

For me the biggest dampner is the yellow black registration plates. Apart from having to pay commercial road taxes at all state borders, including within Delhi, these cars are easy prey for the outstation cops. And with the new fines being what they are - thank you but no thank you. One needs to budget an additional 10-15k per trip per state the moment you plan to step out of your home state.
From their FAQ::
What will be the registration category of the car?

The car will be registered with a black number plate. It is a premium category of commercial registration, typically used by high-end hotels and large corporates. It comes with an All India Tourist Permit


One important finding:

Is there limit on Kms driven?

Your car will come pre-loaded with 25,000 free Kms per year. The average private car in India gets driven for less than 15,000 Kms per year, hence the free Kms will likely suffice in most cases.
The excess Kms will be measured and billed on a quarterly pro-rated basis.

Is this really a joke?

Last edited by abhishek46 : 17th September 2019 at 17:21. Reason: Added multi quotes
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Old 17th September 2019, 17:56   #20
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Default Re: Mahindra launches car subscription service

As with everything which sounds too good to be true, it probably isn't.

Some disadvantages outright
> Less selection of variants, mostly low end models
> Yellow Board and 80kmph speed limit
> Yearly kilometer limit
> No tax benefits unlike corporate lease

Let's look at Revv's Open model, and how bogus it finally turns out to be:

> Choosing XUV 300 W4 Petrol

Monthly Rate
12 month: Rs 34660
24 month: Rs 29040
36 month: Rs 27170
48 month: Rs 26230

Cost to acquire the car post lease
12 month: Rs 712700
24 month: Rs 558500
36 month: Rs 401800
48 month: Rs 213600

Cost to own the car:
12 month: Rs 1128620
24 month: Rs 1255460
36 month: Rs 1379920
48 month: Rs 1472640

On Road Price of XUV300 W4 Petrol in Bangalore: 9.85 lacs

So, you end up paying between 14.5% to 49.5% over the price of the car, depending on lease period.

Now, consider that you have no intention to acquire the car, and will be returning it to Revv at end of subscription.

Cost over the period
12 month: Rs 415920
24 month: Rs 696960
36 month: Rs 978120
48 month: Rs 1259040

Now, comparing the value with resale value of the car, you effectively end up with a resale value equivalent of 5.6 lac (1yr), 2.88 lac (2yr), 0.07 lac (3yr), minus 2.74 lac (4yr).

My calculations do not include maintenance expenses, but I think the point still stands.

Even with loan interest, it makes more sense to just sell the car yourself if you do not require it anymore. And if you have plans to keep the car, it makes very good sense to buy the car outright.
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Old 17th September 2019, 19:41   #21
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Default Re: Mahindra launches car subscription service

Isn't FAQ confusing? I believe this will be black number plate with yellow numbers which means driver needs to stop at each RTO check post and pay state road tax.
Unless car is needed for short duration or tax benefit in business this doesn't make any sense for individual buyer.
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Old 17th September 2019, 20:01   #22
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Default Re: Mahindra launches car subscription service

Is it only me who thinks this service was launched in partnership with Orix?

The terms and conditions make it seem very one sided. For ex
1. Minimum commitment of 1 year subscription, nothing lesser is supported
2. Very high residual value
3. Unrealistic limitation on the models, for all the bigger cities makes automatic a good choice but none is offered.

If I am subscribing to an automobile, I might as well give some comfort to the knees.
Even for business this does not make sense. Business gets benefited when asset is owned by the company. The asset can be under finance or lease but the ownership must be with company to claim tax deductions.
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Old 18th September 2019, 07:51   #23
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Default Re: Mahindra launches car subscription service

Car lease is popular in US due to lesser taxes. In India with GST and the interest rates offered by the car lease management companies the cost of operating the vehicle gets high. So for obvious reasons the monthly cost goes up.

While it's a good move from Mahindra and atleast adds one more option to this market the users for these schemes (similar ones from Hyundai + Revv) is primarily people who moved cities and for some reason cannot carry his car to that new city or don't have a car and doesn't know how long he will stay in a new city. But then the minimum duration of 1 year is a deterrent for that customer.

These schemes when taken with partnership with employers gives one tax benefit. Standalone ones like the one Mahindra has announced doesn't give that option and is just one more avenue for the OEM. They also know it will be a very small % of total revenue in current shape.

Last edited by khan_sultan : 18th September 2019 at 08:02. Reason: line spacing for better readability
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Old 18th September 2019, 08:32   #24
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Default Re: Mahindra launches car subscription service

I’m not comfortable with the yellow plate and the speed restriction. Heck, these are SUVs and most people would want to take them out on long tours. I’ve been in that situation in a zoomcar Aspire and would not want to go through it again. Not for speeding but you feel utterly hopeless crawling around at that speed.
But then again, this would be a fantastic thing for electric cars like the e2o. I would surely get something like this for my daily commute. The only deal breaker is the yellow plate which in Pune makes you pay cantonment entry fee of ₹ 30 each time you pass.
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Old 18th September 2019, 18:04   #25
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Default Re: Mahindra launches car subscription service

Only automatic available is Alturus G4 2WD. The least they could do is list atleast one automatic variant of each car, I don't see harm in doing that. People might prefer automatics over manual for subscriptions.

I was looking for automatic, only Alturas G4 2WD is available. Rs 86,390/- monthly excluding GST, with approx 2000 km monthly / 25000km annual cap.

86,390+ 18% = Rs 1,03,120 /- Ahem Ahem

Approx 12L/yr ... good-luck with that

Its not just Mahindra, all players are in view of milking the subscription cow. For me, self-drive rentals seem to be better option than these.
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Old 1st May 2020, 18:44   #26
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Default Re: Mahindra launches car subscription service

Quote:
Originally Posted by CarJunki View Post
Checked the site, strangely only automatic option is Alturas G4.
Also the XUV models are lower end. I am not able to understand why limit the service to only few variants of each model?

I am hoping this becomes successful, we may start getting more reliable pre-used vehicles in used car market.
I think that's because the Alturas G4 was launched in india only in the Automatic guise.
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