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Old 13th September 2019, 11:45   #1
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Default Mahindra launches car subscription service

Mahindra has launched a car subscription service in partnership with Revv. It will enable private buyers to use Mahindra vehicles without having to own one.

Mahindra launches car subscription service-mahindra-subs.jpg

Subscription options are available on the KUV100, TUV300, XUV300, Scorpio, XUV500, Marazzo and Alturas G4. Depending on the model and variant, prices start at Rs. 19,720 per month, which includes insurance and maintenance charges. The vehicles will be available for a period of 1-4 years.

Customers need to pay a refundable deposit based on the model and the usage period. The vehicle will be delivered within a period of 1 month. The first month's fee has to be paid in advance, prior to delivery. When the minimum subscription period is over, the person can return the vehicle or can purchase it from the company at a pre-determined charge.

Customers are not required to pay an initial downpayment as is the case with purchasing a new vehicle. Customers can upgrade the model from time to time.

In the first phase, Mahindra's subscription service will be available Delhi (NCR), Mumbai, Pune, Bangalore, Hyderabad, Kolkata, Chandigarh and Ahmedabad.

Link to Team-BHP News
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Old 13th September 2019, 13:37   #2
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Default Re: Mahindra launches car subscription service

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.

So the key to people opting in high numbers for this plan actually will lie in the currently unmentioned pre-determined amount that one has to pay for transfer after 4 years. If thats lucrative, people will opt in. Regardless of whether they really keep the car to them after 4 years or not. This option infact gives the freedom to change car (or buy a separate one from other brand) after 4 years without the headache of transfer, selling old car etc.

Finally something similar to the most common car ownership trend in the EU coming to India. Very few buy cars in Europe now a days. Most opt for long term lease like this. Where insurance, tax, servicing is all a headache for someone else.
Kudos to M&M for taking the initiative independently and not through stupid arrangements via zoomcar etc. I hope this succeeds.

I checked the portal. Details are quite well laid out. Car is brand new ordered for individual after registering for the lease. Not a used car. So thats great. One can select colour, add own aftermarket accessories etc. That is just brilliant. Just 1 small limitation is that it will come with a yellow-on-black number plate (like hotel cars, self-drive cars). These kind of cars are prone to be stopped for checks more at state borders etc. Of course they have clearly mentioned that the car will be equipped with a tele-matics and tracking device for car safety. I think thats okay.

Last edited by Reinhard : 13th September 2019 at 13:44.
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Old 13th September 2019, 14:54   #3
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Default Re: Mahindra launches car subscription service

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.
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Old 13th September 2019, 14:59   #4
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Default Re: Mahindra launches car subscription service

From my time spent in the US, one thing I noticed was the huge numbers of ex-lease cars that would flood the used car market from time to time. Even when their economy was in the doldrums in 2013, the only used cars that became available were ex-lease cars. The compact SUV that I bought in 2013 in the US was one such vehicle...

I'm secretly hoping that this business model really takes off, so that the vehicles that aren't bought off by their ex-lessees will hit the used market in huge numbers and drive prices down. I'm waiting.
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Old 13th September 2019, 16:05   #5
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Default Re: Mahindra launches car subscription service

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.
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Old 13th September 2019, 16:14   #6
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Default Re: Mahindra launches car subscription service

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.
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Old 13th September 2019, 17:05   #7
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Default Re: Mahindra launches car subscription service

Agree with above posts.
States like Andhra Pradesh asks Commercially Registered car to pay 1 year road tax (which is around 8,000 Rs), even if you wish to enter the state for just 1 day.
Plus in cities like Pune where there are multiple Military Cantonment Check Posts which asks you to pay entry tax every day.
Today the rate stands at 30 Rs for commercial passenger car.
So this will pose a big problem in making such schemes viable.
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Old 13th September 2019, 17:48   #8
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Default Re: Mahindra launches car subscription service

Good move on part of Mahindras to diversify the ways in which one can access and drive a car. More such flexibility will be needed as the country's per capita income grows, tastes change, needs evolve and legislation changes. There will be many (read business men and companies) for whom the yellow number plate will not be such a big issue, the lease rentals a tax deduction and the GST set off-able.
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Old 13th September 2019, 18:47   #9
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Default Re: Mahindra launches car subscription service

I have just calculated the total cost and you end up paying much more than you would pay for the same car by owning it.
It's a big no for me mainly because of the extra cost and the yellow-black number plate.
The only good thing I see over here is the freedom of changing cars every 2 or 3 years which is good for people like me who start craving for new cars with every new launch
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Old 14th September 2019, 13:24   #10
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Default Re: Mahindra launches car subscription service

I was seriously considering the subscription option from Zoomcar but was totally turned off by the speed governors in these cars. One of the FAQs. https://www.zoomcar.com/zap-subscribe-faq

Quote:
Will the cars be fitted with speed governors?
The car would be registered under Zoomcar's Self Drive Car Rental license, which makes it commercial in nature. As per government regulations, all the commercial cars need to be fitted with speed governors. So yes, your car comes with a speed governor installed that limits your speed to 80 km/h. Do remember that this is for your own safety
Since, Revv and Zap are same in nature, I am sure that these cars will also come with speed governors pre-installed. Two years ago, we hired a brand new Innova taxi in Kerala for a week long trip which was equipped with a speed governor. It was the most miserable experience ever. Imagine being on a six lane empty highway where a tank like Innova crawling at a max of 80 KMPH while a 30+ years old overloaded state transport bus overtakes you at amazing speeds. I don't want to be in that situation. NEVER.
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Old 14th September 2019, 14:47   #11
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Default Re: Mahindra launches car subscription service

Quote:
Originally Posted by V.Narayan View Post
Good move on part of Mahindras to diversify the ways in which one can access and drive ... GST set off-able.
You are right sir. On the surface this looks like a good thing for me. Will ask the office to check it out.
On the issue of crossing borders, this does not apply here since i will use the car primarily within Bangalore; same goes for the speed governor system.
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Old 14th September 2019, 23:49   #12
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Default

Honda Cars India has announced the launch of its new car leasing services in association with ORIX
https://m.indiacarnews.com/article/n...4997/34997/amp
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Old 16th September 2019, 08:07   #13
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Default Re: Mahindra launches car subscription service

Would never pick something like this for my personal use. The taxi number-plate & 80 kmph speed limit are deal-breakers to me. Plus, I keep my cars for long and ownership works out far cheaper (buying pre-worshipped makes it sweeter).

On the other hand, this might make sense for those who need a short-term rental.

And also for business owners. They get 25% tax benefit on the spot as the lease cheque is written off as an expense.
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Old 16th September 2019, 08:45   #14
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Default Re: Mahindra launches car subscription service

I checked the options of Mahindra cars, the leasing offer for KUV 100 Diesel is very attractive for short term buyers. They quoted about ₹26K for diesel variant @2000 kms per month.
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Old 16th September 2019, 09:11   #15
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Default Re: Mahindra launches car subscription service

Quote:
Originally Posted by GTO View Post
Would never pick something like this for my personal use. The taxi number-plate & 80 kmph speed limit are deal-breakers to me.
The way I knew it - the 80kmph governor was installed on "transport" registration. i.e. Black on yellow plates. The subscription cars will come with self-drive like yellow-on-black plates. Like Revv/Zoomcar. Do those cars also have the governor? I have seen them doing good speeds generally.

Also - didn't the union ministry roll-back that restriction after too much negative feedback? Or its still in limbo (or still present in Maharashtra)?
Link - AutoCar news on speed limiters
Quote:
Originally Posted by GTO View Post
On the other hand, this might make sense for those who need a short-term rental.
It would actually also make a lot of sense for those on-the-fence customers who aren't able to decide whether to opt for a CSUV/C-Segment Sedan/SUV. This gives a fairly affordable way to have a risk-free experience of ownership without big investment. As long as M&M keeps sensible payment terms for change of ownership without asking for too much margin there - it will make good sense in the long term as well. Totally dependent on the way M&M prices that part though.

Then, there are quite a few who prefer to change their car every 5 years or so (in tandem with their extended warranty cover & to always have a new car feel). This subscription might be an easy way to achieve that without extra headache of car exchanges, service & maintenance et all.[/quote]
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