[TusharK]

Shared mobility company Revv has launched OPEN - a new car subscription model. It is expected to make cars more accessible without the hassles of traditional car ownership.



OPEN offers users a new car of their choice without having to pay any down payment or road tax. Users will be charged a monthly fee for a duration of 12-48 months. The fee will include maintenance and doorstep pickup and delivery of the vehicle. The cars can be returned at any given time during the subscription period.

There are more than 25 models to choose from including those from brands like Hyundai, Maruti Suzuki, Mahindra, Nissan, Tata, Toyota, Honda and Ford.

OPEN has been launched in 6 cities - Delhi NCR, Bangalore, Hyderabad, Mumbai, Pune and Kolkata. The company plans to add 9 more cities to the list by the first week of December 2018.

Link to Team-BHP News

[RSM_TorqueZoner]

This is very interesting, can be a huge hit if the subscription costs turn out cheaper than typical EMI's. Car leasing is super popular in the US, this can be India's first alternative to such an option. Can be a game changer if done right, any idea on what the subscription plans are?

[Zappo]

Well, they are not the first one here. Zoom already has a similar model in place and they advertise it everyday (not able to recall the name though) on most of the popular TV channels if you would have observed.

[Nav-i-gator]

Originally Posted by RSM_TorqueZoner

This is very interesting, can be a huge hit if the subscription costs turn out cheaper than typical EMI's. Car leasing is super popular in the US, this can be India's first alternative to such an option. Can be a game changer if done right, any idea on what the subscription plans are?

I just checked their website. The monthly subscription charges are quite high, higher than the EMI's for sure. You have to pay for fuel (of course), and insurance only. I don't think there would be any option of NCB transfer as well, so insurance cost will be higher too. Plus, car would be registered in company's name I believe, and buying back after a year will make you 2nd owner technically.

[Rajeevraj]

Rates seem higher than a typical EMI. Just checked for a Honda City. In addition, insurance has to be paid by you and there is a lock in period of 12 months. Main advantage I see is that you don't need to make any down payment and also no road tax burden. Sounds similar to a corporate car lease program. Also looks like the options offered are the 'safer' ones. For example no VW or Skoda .

[i74js]

The values are excluding GST, the final burden on lessee would be even higher. This makes sense for people who change their cars within 3 years of purchase and certainly not for a large number of buyers who would generally stick with a car for 6 - 7 years.

Cheers !

[speedmiester]

Apart from the monthly payment charges, there is GST component as well which stands at 18% of the EMI. This can add as much as 7K to the EMI for the Honda City mentioned above.

[y448]

With the above rates for Honda City, the total cost for 48 months of usage is coming to INR 1,596,681.60 after adding GST @18%!! So this is around the same you pay for a top end Honda City if you were to buy one new and in case you do not want to keep the car for 4 years, your spend for each year is as follows;
1st year = INR 552,098.40
2nd year onwards till 4th year = INR 348,194.40 per year.

Wondering if it really makes sense to get a car through this scheme from the expenditure perspective?

[vshankarhere]

Originally Posted by y448

Wondering if it really makes sense to get a car thought this scheme from the expenditure perspective?

You missed the money you would get back in case you sell the car after the end of 4 years ownership. In this subscription scenario, the subscriber has to pay the residual value to become the second owner right? What's the point then! 🤔

[sharktale]

Very smart distribution of pricing in favour of Revv I must say.

Using the average rate, it would have made sense for very short term ownership (0-2 years ). Thus, Revv has smartly kept the 1st year installments high, so that one is discouraged from getting the car for a year alone. However, there's no sweet spot in my calculations. Due to this higher 1st year payments, it's neither feasible for the short term, nor feasible for the long term, since the costs are higher than full-cash purchase.

It could only make sense for companies, who can claim these as expenses, and also take input tax credit if that is permissable for this service code.

[agambhandari]

Even a 4 year purchase of a car, For example Ecosport Petrol Trend variant is around the on road price of the car(10 lacs in this case). This puts the monthly cost of the car very close to the actual EMI of a car that you possess after the loan period is over, and more importantly has a resale value.(Easily 4-5 lacs at least after 4 years). Unless you are someone who has really bad credit history or has made a series of financial decisions and desperately need a car immediately, there are much better ways to get a car.

[Moto_Hill]

Originally Posted by Zappo

Well, they are not the first one here. Zoom already has a similar model in place and they advertise it everyday (not able to recall the name though) on most of the popular TV channels if you would have observed.

It's called zap subscribe. One can lease a car for a minimum lock-in period of 6 months to maximum 36 months. Post 36 months, the customer can also keep the car by paying a certain value. What is interesting though is during lease period, the car can be shared on rental and subscription cost can be reduced up to 70%. I casually checked Ford freestyle subscription assuming one rents out 10 days a month for 3 years.

[shankar.balan]

Car leasing doesn’t really work for individuals at all. It works mainly for Companies and for Professionals because they can claim tax credit. In the world of today, it may actually make better sense to use Uber and Quick Ride for the daily horrid commute (“Vile to Drive”). And perhaps rent a self drive car or chauffeur driven car for those out of town holidays or similar.
But in my experience, even the Uber vehicles are a bit hit or miss. Most of them (in India) are dusty, smell horrible and in many cases, I ve even picked up a skin itch or rash by sitting in those vehicles purely because the drivers dont maintain them well.

[Zappo]

Originally Posted by Moto_Hill

It's called zap subscribe. ... What is interesting though is during lease period, the car can be shared on rental and subscription cost can be reduced up to 70%. ...

Very interesting business model! So essentially its a little different approach but hats off to whosoever thought of this. So not only are they giving you a leased vehicle experience (instead of outright purchase or daily bookings) but in effect they have outsourced the headache of renting out the car to you. Brilliant! Remember, at 18000 plus rent every month it will otherwise barely make much sense over picking up a new Freestyle on EMI.

[VKumar]

Just 2 years back I came across a situation where I needed a new Innova for 2 months. I had a word with a few operators after looking at all other hassles and then decided to rent one.

After some hagging, our total expenses for 3000 kms per month (though normally they charge 200 kms min per trip) came out at 36000 for car and 12000 for driver (they charge 500 per night normally).

That makes 48000 for an Innova with a promised low runnung. If I want a very short term ownership; then I would again go for the options like this one as it includes fuel, maintenance etc all. Additionally I get a chauffeur who will not only drive; but will also take care of the safety of the car.