OTO Capital Sees A Surge In Dealer Partnerships Opting For Vehicle Leasing Plans
OTO Capital, a vehicle leasing startup, has reported a surge in partnerships with automotive dealers in Pune. Over 40 automotive dealers in the city have signed up with OTO Capital to provide vehicle leasing as an alternative model of financing to their customers, including Parineeti Honda, Garve Bajaj, Shiv Suzuki and Autolounge Vespa. Since the national lockdown restrictions have been eased, demand from consumers has also increased, with 28-30% of auto buyers inquiring about leasing options instead of vehicle loans.
OTO is witnessing more than 120% increase in applications for leasing two-wheelers from dealers compared to February this year. The company has received over 5000 applications for low and mid-range models, while high-end models and niche brands have not seen similar numbers in the past 3 months. In the month of June alone, more than 45 two-wheelers have been leased through OTO in Pune.
The recent BS-VI norms have pushed the cost of buying vehicles during an industry-wide slowdown. Dealerships have reported that in recent weeks, consumer demand has started gearing up slowly but buyers are leaning towards affordable models, especially in the two-wheeler market. There has been a surge in demand for scooters and early entrant bikes priced below INR 1 Lakh. Customers are also looking for alternative finance options other than vehicle loans to make their auto purchases. Dealers are now actively recommending vehicle leasing to customers who are wary of taking long-term bank loans during uncertain times.
The COVID19 pandemic has also impacted auto sales throughout India. The market for alternative models of financing is opening up, due to the fear of sharing cab rides or visiting dealerships in person for test driving. Another important factor that has contributed to the sudden surge in demand for leasing is the economic turbulence that has contributed to mass layoffs and job uncertainty in the cities. Buyers are searching for cost-effective goods that do not require long term commitment or maintenance. Leasing provides the flexibility and affordability that was not available to retail buyers earlier.
Sumit Chhazed, Co-founder, OTO Capital “We are pleased to announce our new partnerships in Pune. We were surprised to see that consumers have started buying two-wheelers again since June and we want to strengthen our efforts in the city. Since the COVID19 outbreak, vehicle sales have been dipping even further but buyers are now asking dealers for alternative financing options. Leasing not only reduces the overall cost of owning the two-wheeler but also comes with the added benefit of paperless, contactless transactions, home delivery of vehicles and flexibility to return the vehicle within 3 years. We hope to sign up more dealers in Pune by the end of this year.”
