Mercedes introduces an extended 10 year loan tenure

Durango Dude · 26th May 2020, 17:01

I've not voted for either option; these are very very very difficult and uncertain times we live in. I'd never take a loan at all, if you can't afford a Merc; this is no way to "afford" one. Almost all sources of income are evaporating, sit tight have a tighter leash on expenses, factor in health that's sure to take a hit. Time for some penny pinching and definitely not a time to buy "luxury".

Cresterk · 26th May 2020, 17:55

Hmm, when I read the title, I figured it would be a 0% apr loan like many car companies introduced in the US as a way to eke out a few sales during this pandemic. For financially savvy people, such a long term loan would prove to be very attractive as they would rather invest the lump sum elsewhere and earn money off of that while paying of the smaller amounts. That's an option I would definitely take even if I had the lump sum with me and it would also be really tempting even if I wasn't planning on shopping for a car until after a year or two.

This one however seems to have a higher than standard interest rate so I'm not sure what their goal is here. Beat inflation? Make money off of salarymen who can in no way afford this car but who really really want that 3 pointed star on their grill?

vkochar · 26th May 2020, 18:02

This is basically 2 car loans in 1. When 1 ends you start the next one. It is an extremely desperate scenario offering which is what today is.

Anyone wanting to buy a car in this segment. BARGAIN and then go to your bank and get them to finance. You will end up getting a much much better deal.

These schemes look good and sound good but reality is far from it.

mayjay · 26th May 2020, 23:46

How long before the car loan tenures overtake house loan tenures?
The luxury car prices are certainly going in that direction, being equivalent to a decent sized flat in a Metro!

Maybe just do a reverse of the real estate schemes of 5-10 years back: when developers used to offer BMW or Mercedes cars to sell a flat, now the luxury OEMs can start bundling small flats with their cars.

CarNerd · 28th May 2020, 11:12

Say I want to buy a Rolls Royce on loan, what might be the duration of the loan?? 10 generations??

Annibaddh · 28th May 2020, 11:54

Quote:

Originally Posted by GTO

Your C-Class will cost you more than double the original price.

A fool and his money parted, honestly.

Further, just a handful of people own cars for 10 years. Which means, the dude buying a Mercedes on a 10-year loan will be jumping from one car loan to the other.

Insane. Plain insane. Much better to buy pre-loved and love it some more!

Kosfactor · 28th May 2020, 12:49

As per this article luxury car buyers change vehicles often.

https://www.livemint.com/Money/G7ugD...more-freq.html

However I think long term car loans are helpful be it any segment (If you can afford that car), just like 25 year old housing loans, it would help reduce the EMI and balance the monthly expenses. Just as the case with 25 year old housing loans that sometimes gets closed within 10 years, a 10 year car may loan may get closed in 4 or 5 years as the customer`s financial situation improves, in which case you got the car you wanted and at the time of your life you wanted it. Yeah you paid a bit more interest etc etc, but you cant put a price on everything.

It would be unwise to spend 40L and buy a Mercedes just because the EMI is the same as a Duster over 3 years, the running costs, maintenance , insurance, breakfix etc will bankrupt that person and you now have a garage queen to deal with. Much like taking Alto money and bringing a Civic home, just because you could afford an Alto.

AspiringIndian · 28th May 2020, 13:11

Call me old school, but I would only buy a vehicle when my income is at-least 10 times the price of the car in question. The car should be an expense that I won't need to think of after it's been made. Also it gives me a feeling of pride of having "earned it".

Afterall these vehicles are supposed to invoke pride - not false pride.

But that is really just me !

NiInJa · 28th May 2020, 15:59

I don't mind taking a car loan for a tenure of up to 3 years, but 10 years is an overkill, the useful life (not in absolute terms) of any car today is 10 years, after that people want to move on. I cant even think of how much money one must have paid as total ownership cost at the end of 10th year.

I wonder what are the next marketing tactics these companies are going to come up with. Chain marketing maybe

KGS · 28th May 2020, 16:12

10 year is too long time to consider for a car.

I would prefer buying a car for which I can pay completely without any loan. If at all I am going for a loan, I would prefer a short tenure like 3 years or less. This helps to close the loan and bank related formalities before we move to the new shiny options available in market.

haneeshN · 28th May 2020, 16:26

I haven't voted for either as I don't like to take loans for a car.

Even if I decide to take a loan, no way I'll ever sign up for decade long loan unless they come with 0% interest. I haven't taken any automobile loan, though it is not easy to buy with full payment for a salaried person like me. Long term commitment of paying a fixed EMI is what stops me from taking a loan and I am fine with it even if I cannot buy my dream car without a loan.

ps: Can we add "I don't like taking a loan for a car" as a third option for the minority like me.

Heart_Revs · 28th May 2020, 17:27

Bargaining upfront will save more money than all the oppurtunity cost calculations of keeping my cash and investing elsewhere. Fiscal prudence also says that car cost should be less than 50% of yearly income.

Maruti is proposing leasing of cars. If this is he situation of Maruti then one can understand the situation of marginal players like Skoda, Nissan etc. Luxury carmakers must be facing unbearable heat in the market.

And why would I need a car now when my running is reduced and I have lost avenues to drive it ?

AZT · 28th May 2020, 17:30

Quote:

Originally Posted by AspiringIndian

Call me old school, but I would only buy a vehicle when my income is at-least 10 times the price of the car in question.

So to put things in perspective, you would buy a 6 lakh car when your income is 60 lakhs. This does not sound right.

AirbusCapt · 28th May 2020, 19:01

These kind of schemes are useful in getting more people into the brand. What is so wrong if a buyer who wouldn't afford a merc buy it on a 10 year loan? It's good for the competition, atleast he wouldn't pay 25 plus lakhs for a hatchback sized overpriced "pseudo" SUV.

itwasntme · 28th May 2020, 19:20

Quote:

Originally Posted by AZT

So to put things in perspective, you would buy a 6 lakh car when your income is 60 lakhs. This does not sound right.

Your current drive looks like an X1 retailing for 40L+.

View Poll Results: Would you consider longer tenure (7 yrs, 10 yrs) car loans for lower EMIs?
Yes, will consider such a finance scheme.	104	23.64%
No, never! I prefer shorter tenure (3 yrs, 5 yrs) car loans.	336	76.36%
Voters: 440. You may not vote on this poll

26th May 2020, 17:01	#16
Durango Dude Senior - BHPian Join Date: Mar 2009 Location: Chennai Posts: 1,967 Thanked: 5,180 Times View My Garage	Re: Mercedes introduces an extended 10 year loan tenure I've not voted for either option; these are very very very difficult and uncertain times we live in. I'd never take a loan at all, if you can't afford a Merc; this is no way to "afford" one. Almost all sources of income are evaporating, sit tight have a tighter leash on expenses, factor in health that's sure to take a hit. Time for some penny pinching and definitely not a time to buy "luxury".
	(3) Thanks

26th May 2020, 17:55	#17
Cresterk Senior - BHPian Join Date: Mar 2019 Location: Kerala Posts: 1,784 Thanked: 6,295 Times	Re: Mercedes introduces an extended 10 year loan tenure Hmm, when I read the title, I figured it would be a 0% apr loan like many car companies introduced in the US as a way to eke out a few sales during this pandemic. For financially savvy people, such a long term loan would prove to be very attractive as they would rather invest the lump sum elsewhere and earn money off of that while paying of the smaller amounts. That's an option I would definitely take even if I had the lump sum with me and it would also be really tempting even if I wasn't planning on shopping for a car until after a year or two. This one however seems to have a higher than standard interest rate so I'm not sure what their goal is here. Beat inflation? Make money off of salarymen who can in no way afford this car but who really really want that 3 pointed star on their grill?
	(5) Thanks

26th May 2020, 18:02	#18
vkochar Senior - BHPian Join Date: Aug 2006 Location: Delhi / Agra / London Posts: 2,146 Thanked: 821 Times View My Garage	Re: Mercedes introduces an extended 10 year loan tenure This is basically 2 car loans in 1. When 1 ends you start the next one. It is an extremely desperate scenario offering which is what today is. Anyone wanting to buy a car in this segment. BARGAIN and then go to your bank and get them to finance. You will end up getting a much much better deal. These schemes look good and sound good but reality is far from it.
	(2) Thanks

26th May 2020, 23:46	#19
mayjay BHPian Join Date: Feb 2008 Location: Delhi Posts: 276 Thanked: 377 Times	Re: Mercedes introduces an extended 10 year loan tenure How long before the car loan tenures overtake house loan tenures? The luxury car prices are certainly going in that direction, being equivalent to a decent sized flat in a Metro! Maybe just do a reverse of the real estate schemes of 5-10 years back: when developers used to offer BMW or Mercedes cars to sell a flat, now the luxury OEMs can start bundling small flats with their cars.
	(24) Thanks

28th May 2020, 11:12	#20
CarNerd BHPian Join Date: Nov 2014 Location: Honda City Posts: 447 Thanked: 2,923 Times	Re: Mercedes introduces an extended 10 year loan tenure Say I want to buy a Rolls Royce on loan, what might be the duration of the loan?? 10 generations??
	(8) Thanks

28th May 2020, 12:49	#22
Kosfactor Distinguished - BHPian Join Date: Oct 2018 Location: COK\BLR\MYS Posts: 3,679 Thanked: 10,493 Times	Re: Mercedes introduces an extended 10 year loan tenure As per this article luxury car buyers change vehicles often. https://www.livemint.com/Money/G7ugD...more-freq.html However I think long term car loans are helpful be it any segment (If you can afford that car), just like 25 year old housing loans, it would help reduce the EMI and balance the monthly expenses. Just as the case with 25 year old housing loans that sometimes gets closed within 10 years, a 10 year car may loan may get closed in 4 or 5 years as the customer`s financial situation improves, in which case you got the car you wanted and at the time of your life you wanted it. Yeah you paid a bit more interest etc etc, but you cant put a price on everything. It would be unwise to spend 40L and buy a Mercedes just because the EMI is the same as a Duster over 3 years, the running costs, maintenance , insurance, breakfix etc will bankrupt that person and you now have a garage queen to deal with. Much like taking Alto money and bringing a Civic home, just because you could afford an Alto.
	() Thanks

28th May 2020, 13:11	#23
AspiringIndian Newbie Join Date: Jun 2019 Location: Pune Posts: 22 Thanked: 39 Times	Re: Mercedes introduces an extended 10 year loan tenure Call me old school, but I would only buy a vehicle when my income is at-least 10 times the price of the car in question. The car should be an expense that I won't need to think of after it's been made. Also it gives me a feeling of pride of having "earned it". Afterall these vehicles are supposed to invoke pride - not false pride. But that is really just me !
	() Thanks

28th May 2020, 15:59	#24
NiInJa Senior - BHPian Join Date: Sep 2012 Location: Pune Posts: 1,094 Thanked: 3,947 Times	Re: Mercedes introduces an extended 10 year loan tenure I don't mind taking a car loan for a tenure of up to 3 years, but 10 years is an overkill, the useful life (not in absolute terms) of any car today is 10 years, after that people want to move on. I cant even think of how much money one must have paid as total ownership cost at the end of 10th year. I wonder what are the next marketing tactics these companies are going to come up with. Chain marketing maybe
	() Thanks

28th May 2020, 16:12	#25
KGS BHPian Join Date: May 2019 Location: London Posts: 50 Thanked: 204 Times	Re: Mercedes introduces an extended 10 year loan tenure 10 year is too long time to consider for a car. I would prefer buying a car for which I can pay completely without any loan. If at all I am going for a loan, I would prefer a short tenure like 3 years or less. This helps to close the loan and bank related formalities before we move to the new shiny options available in market.
	() Thanks

28th May 2020, 16:26	#26
haneeshN BHPian Join Date: Jun 2017 Location: Bangalore Posts: 88 Thanked: 429 Times	Re: Mercedes introduces an extended 10 year loan tenure I haven't voted for either as I don't like to take loans for a car. Even if I decide to take a loan, no way I'll ever sign up for decade long loan unless they come with 0% interest. I haven't taken any automobile loan, though it is not easy to buy with full payment for a salaried person like me. Long term commitment of paying a fixed EMI is what stops me from taking a loan and I am fine with it even if I cannot buy my dream car without a loan. ps: Can we add "I don't like taking a loan for a car" as a third option for the minority like me.
	() Thanks

28th May 2020, 17:27	#27
Heart_Revs BHPian Join Date: Oct 2019 Location: Silchar Posts: 87 Thanked: 280 Times	Re: Mercedes introduces an extended 10 year loan tenure Bargaining upfront will save more money than all the oppurtunity cost calculations of keeping my cash and investing elsewhere. Fiscal prudence also says that car cost should be less than 50% of yearly income. Maruti is proposing leasing of cars. If this is he situation of Maruti then one can understand the situation of marginal players like Skoda, Nissan etc. Luxury carmakers must be facing unbearable heat in the market. And why would I need a car now when my running is reduced and I have lost avenues to drive it ?
	() Thanks

28th May 2020, 19:01	#29
AirbusCapt BHPian Join Date: Nov 2018 Location: Hyderabad Posts: 575 Thanked: 2,798 Times	Re: Mercedes introduces an extended 10 year loan tenure These kind of schemes are useful in getting more people into the brand. What is so wrong if a buyer who wouldn't afford a merc buy it on a 10 year loan? It's good for the competition, atleast he wouldn't pay 25 plus lakhs for a hatchback sized overpriced "pseudo" SUV.
	(2) Thanks