Car Makers Offer Benefits To Buyers: Zero Down Payment, 100% On-Road Funding, EMI Holidays

Automakers operating in India have been facing a worsening slump for a while now. April almost acted as a final nail in the coffin, as sales went from low to zero for many auto makers. With the economy now being opened up for several activities, auto makers are planning to tempt customers with a range of offers.

Recent updates indicate that these offers will include 100% on-road financing, installment holidays, vehicle loan repayment assurance programmes and more. In addition, car makers are taking their own routes to further simplify things for buyers in such times of crisis.

Maruti Suzuki India Limited is in talks with banks to allow easier EMIs for customers. With the loss in income of majority of the potential market, MSIL is pushing for ¡°extend longer loan tenures, lower interest rates and down payments,¡± as per an ET report.

Even if none of the above are brought to effect, the company also has a ¡®step-up¡¯ scheme in plan which would include lower installments initially and higher ones later on.

(Representative Image: BCCL)

On similar lines, Hyundai Motor India Ltd (HMIL) has launched the Hyundai EMI Assurance Scheme in association with Shriram General Insurance. Under the scheme, the company will pay three installments of a vehicle if a customer loses his job. The scheme is only valid on fresh purchases this month and for private sector employees. It excludes Creta, Tucson, Kona EV and Elantra models.

Tata Motors is offering a range of such incentives too. Most notably, the indigenous car maker is providing up to 100% on-road funding on its entire range of cars and SUVs. Other incentives include long-tenure (up to eight years) EMI schemes, and a customisable EMI payment. Tata Motors has also put up special offers for frontline warriors against the Covid 19 pandemic, including doctors, healthcare professionals and the police.

Toyota Kirloskar Motor (TKM) and Skoda Auto India are providing a zero down payment option to pre-qualified customers. As can be understood, the entire cost of the car will be financed by the firms. While Toyota has extended the offer to select customers based on their credit scores, Skoda is additionally extending an EMI holiday of four-six months. This means that payment of installments will start after four-six months of purchasing the car.

(Representative Image: BCCL)

Others like Honda Cars India are offering upfront discounts of up to Rs 1 lakh on select models. The discounts are in the form of cash discounts, exchange bonuses and extended warranties and more. Honda has even started a contact-less doorstep delivery business model for customers not wanting to step out of their homes.

Further incentives to be offered by car makers might also include longer warranty periods or free services.

ET reports that around ¡°15-20% of 25,000 showrooms and workshops across the country have become operational since Monday.¡± So as the auto industry revives from a crucial blow to sales with the COVID 19 lockdown, such incentives are more or less the only hope for the OEMs to have a healthy bounce. As can be understood though, it comes at a cost to the industry and its stakeholders.