[TusharK]

Mercedes-Benz has launched a special finance scheme called Wishbox 2.0 for its customers. It includes an extended 10 year loan tenure.



As part of Wishbox 2.0, Mercedes-Benz customers will not have to pay EMIs for the first three months. EMIs will commence after 3 months period in the case of 3, 4 or 5 year term loan as customized by the customer.

Under the Step-Up 2020 scheme, customers can opt for a payment option that suits their convenience. This includes low EMIs for the first 6 months and regular EMIs from the 7th month onwards along with a 20% downpayment.

Under the 10-year finance scheme, customers can opt for a guaranteed buy back after 5 years. The per lakh EMI is Rs. 1,499.

Link to Team-BHP News

[Shreyans_Jain]

I honestly believe that if you can’t buy the car on a straightforward 3 year loan, you can’t afford that car. And a 10 year loan on something that depreciates as fast as a premium car is sheer stupidity. 2 new generations of the car would be out by the time your EMIs end, and by then your car will be worth nothing. Oh and if it is diesel, it will simply not remain road legal after your 10 EMI paying years.

All these schemes are ultimately just that, and the buyer ends up coughing a significantly higher amount in total at the end. Of course, marketing people have to do their jobs, but we have to be fiscally prudent.

[Vishal.R]

In order to make this scheme a success, they also need to make cars like W123 from those old / golden days. 10 years timeframe is too long for current "built like a gadget" vehicles.

[GTO]

Originally Posted by Shreyans_Jain

I honestly believe that if you can’t buy the car on a straightforward 3 year loan, you can’t afford that car.

If you need a "10 year scheme" to buy a Mercedes, you can't afford it. It's like going for a 3000-rupee dinner with just a thousand bucks in your pocket. End of the day, a C-Class is going to be a 4-million rupee car, no matter what twisted way you look at it. And if you opt for such a long loan, your C-Class will cost you more than double the original price.

A fool and his money parted, honestly.

Further, just a handful of people own cars for 10 years. Which means, the dude buying a Mercedes on a 10-year loan will be jumping from one car loan to the other.

Originally Posted by Vishal.R

In order to make this scheme a success, they also need to make cars like W123 from those old / golden days.

The Mercedes' of today have vastly improved. They now have between "very acceptable" to "good" reliability. Not quite Lexus or even BMW level yet, but their reliability is overall satisfactory (with a handful of rough patches).

[SmartCat]

Originally Posted by TusharK

As part of Wishbox 2.0, Mercedes-Benz customers will not have to pay EMIs for the first three months. This includes low EMIs for the first 6 months and regular EMIs from the 7th month onwards along with a 20% downpayment. Under the 10-year finance scheme, customers can opt for a guaranteed buy back after 5 years. The per lakh EMI is Rs. 1,499.

EMI per lakh of Rs. 1,499 for 10 years means an interest rate of 13% pa is being charged. Isn't that a bit too high for a car loan? Perhaps the cost of low EMI for first six months and buyback guarantee is recovered from the interest component.

Compared to a 5 year loan, the EMI works out to be 33% lower assuming interest rate is same for both tenures. I wonder if that is good enough to snag customers.

[roby_dk]

I get nightmares thinking of a house loan of 10 years and for a depreciating asset like car it is way too much. Car loan for 3-4-5 years is justified, in 10 years you will pay almost double amount of the actual car cost. Better to buy a car 1 or 2 segment below with maximum down payment.

[hareshjethwani]

Originally Posted by GTO

"10 year scheme"

It's a good scheme for mortals like us who can pick them off for cheap when the original buyer runs out of patience paying the EMI's for 120 months - now that sounds more than 10 years

[Doge]

You know that the economy is turning to crap when even 7 year loans are not enough.
Keeping new Mercedes for 10 years? I hope they extend the warranty to match the tenure, the maintenance is more terrifying than the interest.

[V.Narayan]

A car loan would be a complete no no for me. A ten year car loan sounds like a recipe from my enemies. My rule is to buy what the savings bank balance says it can bear for a cash down purchase. Let the Maybach be defered to the next lifetime.

[Nithesh_M]

If your target audience is the rich folks, why would you need to offer a 10 year loan? Do the rich folks even take loans, let alone a long term one?

They kept hiking prices to keep their entry level cars out of reach of the average joe without a business suit. Now that strategy has spectacularly backfired.

[kiku007]

Take a moment to think why a brand like Mercedes had to do this.

Desperate times folks. That's the reality.

Anyone with a decent level of financial prudence wouldn't take 10 years to pay off a car loan. But not all people are prudent and Mercedes is after them.

And of course there are also the crooks. They may be interested as well. There's many of ways to just default after the fifth year and give the car back to Mercedes.

[GTO]

What makes it worse, there are actually 2 contracts in this stupid 10-year scheme:

3. EZ 10 or 10-year Finance scheme

Customer benefits: First time ever a 10 years loan tenure | Completely affordable upgrades for customers | Low EMI of Rs 1499/lakh

- In a first of its kind initiative, Mercedes-Benz India is extending a customer’s loan tenure
to 10 years. This financial solution is based on 5 years Agility and 5 years refinance, and an amalgamation of two contracts

- The customer also has the option to opt for a guaranteed buy back after 5 Years.

- In addition, the customer can avail the benefit of lowest per lac EMI of INR 1499

[padmrajravi]

I think this will find takers. Not everyone thinks he needs to have the full amount in a savings account to buy a car. If that was the case, we wouldn't be facing all these traffic problems. Modern economies run on debt and someone who is averse to debt is bad for the economy. Agreed that from a personal finance standpoint, this is a bad decision.

Mid-level executives in most companies can afford an EMI of 50-60 K Rs per month and there will be at least a few who wants to upgrade to a C class rather than a Compass or an Octavia. And the buyback makes it even more attractive. It means you can just switch to a different higher value loan as per your increased income 5 years down the line. I don't think MB expects anyone to complete that 10-year loan. They are trying to create an equivalent of lease mechanism through these loans. Combine this with a comprehensive service package and this becomes even more attractive.

[itwasntme]

I’ll swim against the tide here and say that as a ‘normal’ MNC salaried middle-class double income with 2 kids (DI2K) family, IF we do not take advantage of medium to long tenure loans (say 5-7 years), we will NEVER be able to afford that truly aspirational car that we have our eyes on.

This is because new car prices are obscene coupled with Karnataka’s usurious road tax (~21% for C2/D1+ segments) with top variants of even ‘normal’ Seltos / Creta at 20L+. Move up to Superb/Passat/Endeavour/Fortuner and you’re looking at 35-50L. Cast your eyes on the Big 4 and you’re looking at 47-65L for the 3/C/A4 segment.

With these prices and a comparatively low interest rate of ~8%, I’d prefer to pay 20-25L upfront and the rest on EMI on a long tenure loan, which we can easily afford (monthly) given our salaried incomes. Further, we usually prepay our loans within 60-80% of the tenure. I also prefer PSUs (SBI a favourite) and 3 out of our 4 car loans (over 14 years) have been with them.

I am surprised to see such a show of hands against even 5 year terms. I would much rather take the financial plunge, and buy a C300 / 330i / 530i now rather than wait till I am financially set 5 years later.

[Eddy]

Originally Posted by Nithesh_M

If your target audience is the rich folks, why would you need to offer a 10 year loan? Do the rich folks even take loans, let alone a long term one?

https://www.team-bhp.com/forum/india...-purchase.html (Rich folks are not so rich? 65% of Lamborghini buyers finance their purchase)