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Fast Track to Rentals

Filling the void left by cabs and buses since the pandemic, car rental companies have risen to the occasion, offering safe and convenient short-term mobility.

Published: 26th July 2020 05:00 AM  |   Last Updated: 26th July 2020 10:40 AM   |  A+A-

Zoomcar, Car rental

Representational image

Roshni Chopra always used a shared cab to get to work. It was convenient and economical. But today, that convenience has become a big load of worry. Her tech company in Gurugram resumed operations after three months, expecting everybody to report to work immediately. But Chopra couldn't prepare for her re-joining without weighing her commute options. The one that seemed most viable was renting a car.

"With several people sharing the same cab, you never know how safe the vehicle is. It's also impossible to maintain social distance. Renting was a cakewalk. It was a steep proposition—Rs 1,500 per day—but was also a price worth paying in exchange for safety and easy mobility," says Chopra

.Her concern is echoed by many others who’ve begun to find a steady comfort in renting cars. Filling the void left by cabs and buses since the pandemic, rental companies such as Zoomcar, Revv and Myles have been throwing away deals and offers to lure first-time customers.

Approximately Rs 1,500 will get you the convenience of a hatchback like Tata Tiago, Renault and Kwid for 24 hours in Delhi. For a sedan, it's approx Rs 2,200. Price varies based on the condition of the vehicle and how much in demand the model is. 

Earlier, renting a car meant you were going for a weekend trip, a long-haul road trip, or had a broken car. But today, in metro cities, self-drive car rentals have picked up steam and is being preferred by millennial professionals and college-goers who don't own a car but want to drive independently. 

The pandemic has only given this trend an impetus. "We are already seeing a 400 percent rise in the demand for car rentals and we expect this to settle down at 200-300 percent over the next few months. People are now looking for shorter-term mobility access as opposed to long-term investment. The fear of contracting the virus is the sole reason we've seen such a jump in its preference," says Greg Moran, CEO, and Co-Founder, Zoomcar. The industry is looking at various car subscription models to serve the needs of the rising customers, he adds.  

Advantages of leasing a car over buying

"As car subscriptions continue to evolve into flexible plans with longer lease durations such as 12, 24, or 36 months, people feel more inclined towards it. Even in the post-pandemic world, the rental car industry will leverage its advantage of hassle-free leasing out unlike the case of car ownership that demands maintenance expenses. There is always a running expenditure with self-owned cars, besides the problem of inadequate parking space, volatile fuel prices and rising insurance premium," says Moran. While some of these issues arise in rented cars too, it's a short-term responsibility.

What's in the market for you?

Not just Zoomcar, Revv and Myles, carmakers like Volkswagen, MG Motors, and Maruti Suzuki have also come up with car leasing options in an attempt to fix the dent in their businesses. The price at which these cars are leased depends on their size. Subscription (minimum 24 months) for Volkswagen for a top variant Polo will cost around Rs 30,000 a month.

This includes maintenance, servicing, road tax, and insurance. For Zoomcar, the subscription for six months for a Tata Nexon SUV mid-trim automatic will cost around Rs 28,000 per month. This service is offered in all metro cities, and in Goa.

Identity and address proof are the two documents required. The good thing is that prices don't vary state-wise but on the availability of cars. So a 2010 Fortuner available in Delhi will be cheaper than a 2016 Fortuner in Mumbai. However, the older the car, the more maintenance it requires. 

Must keep in mind

As per the government regulations, these cars have to be registered commercially. So, every time you cross a state border, you’ll need to pay the state toll. To drive from Noida to Gurugram, besides the fuel price, you will need to count an additional Rs 200 as MCD and Haryana state toll.

"The government should allow P2P (Peer to Peer Lease) rental. Easing out this regulation will ensure one can lease a car without any commercial taxes, which would bring down the pricing drastically," says Akshay Singh, Vice President, Strategy and Enterprise, Droom, an online platform to buy and sell pre-owned vehicles.

What can make leasing easier?

Given the condition of Indian roads and rogue drivers, there are some drawbacks. If a car gets dented, you’ll have to shell out Rs 10,000 for the company despite their insurance cover damages. This is true for most car rental companies except for the ones that offer Wet Lease (offered by the car makers, not rental companies).

Also, there isn’t any consensus on how much you need to pay for dents.  Volkswagen has come out with a Wet Lease plan that waives maintenance costs. "This covers all the incidental costs and provides customers trouble-free ownership," says Steffen Knapp, Director, Volkswagen Passenger Cars India.

Why are leased cars expensive in India?

Government’s diktat for a commercially licensed number plate makes these cars expensive as the road tax for commercial ones is a lot more than the white number plates. There is also the expense of insurance. To make hiring economical, you need a larger customer base with a solid demand and supply flow that keeping costs low.

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