KOCHI: Car sales in the state have gone down drastically this year and the dealers in Kochi are hit badly. According to industry experts, people are scared to invest in vehicles, especially cars, because of factors like demonetisation and implementation of GST. With sales slumping, the dealers are trying new ways to attract the customers and car leasing is one of it. The trend has become popular in the state and Kochi is considered as its epicentre.
Car leasing helps a customer use a car of his/her choice by paying a monthly instalment for a particular period. The highlight is that a customer has the freedom to choose the vehicle from a wide variety of cars. “Car leasing is prominent among corporate companies and high-profile executives. The advantage is that the car can be leased without a down payment,” says Thomas Kadicheeni, general manager, EVM Wheels.
“Individuals can lease a car too, but they will have to pay three months lease amount in advance payment,” he adds. EVM started car leasing five months ago and has leased 25 cars till now, of which 18 is in Kochi and seven in Thiruvananthapuram.
According to the company, Volkswagen Polo is the one in demand. The lease period is usually 3-4 years. “The customer can lease a car even for two years, but that won’t be viable for the customer and dealer. Once the lease period is completed, the customer has the choice to buy the car or return it to the dealer. If returned, the dealer will put the car for sale or give for rental service,” says Thomas.
What makes the concept interesting is that the insurance, service and maintenance charges are handled by the car company. “The customer needs to worry only about the monthly instalment. As there is no interest incurred, car leasing is a better option when compared to buying a car with bank EMI. If the car suffers damage, the company will handle the repairs. The customer will also be provided with another car till the repair works are carried out,” adds Thomas.
Car leasing is already popular in Western countries. Around 30-40 per cent car users in these places lease the vehicles. “Five per cent of the people in Kerala are using rental/leased cars now. It will surely increase to 30-40 per cent in two years. Right now, cars are registered in the name of the company. Soon, it will be done in the customer’s name,” says Thomas.
According to Shijin Justin, fleet operations manager, Volkswagen Kochi, corporate companies benefit the most from car leasing. “The companies can easily lease high-end cars for their senior officials. The companies don’t have to worry about selling it. Many companies in Kochi have already leased cars like BMW 3, 5 and 7-series for their senior officials.”
Many companies like Mahindra and Hyundai are planning to enter into the leasing sector. “Soon car leasing will be fullfledged. This will revive the automobile industry,” says Thomas.Sarath Krishnan, an employee of UST Global, says car leasing is a great option for Kochi residents. “When I was in the US, I had leased a Jeep Cherokee paying $300 every month (total of around `8 lakh for three years),” he says.
what’s car leasing?
Car leasing helps a customer use a car of his/her choice by paying a monthly instalment for a particular period. The highlight is that a customer has the freedom to choose the vehicle from a wide variety.