[krishnakarthik1]

Voted yes and if there was another option called 'absolutely love it' I would have voted for that.

Sorry guys for being super against the trend but why not if someone is willing to offer. And who knows what would happen after 10 years but now you are in a benz! If and when I grab this offer and get neck deep in debt I will keep you all posted.

[VKumar]

Originally Posted by Shreyans_Jain

I honestly believe that if you can’t buy the car on a straightforward 3 year loan, you can’t afford that car.

Completely agree, have been following a simple rule since years:

Car price < 6 months of income

Have been following this rule since my first purchase, and I am enjoying every bit of the ownership. What's an EMI for a car that makes you reorganize your expenses? I normally buy cars only against upfront payment, but if it's an expensive buy - then it has to be a foreclosure within 24 months -and it worked well for me, every time.

Originally Posted by krishnakarthik1

who knows what would happen after 10 years but now you are in a benz!

Indeed a nice idea if one wants to keep the EMI low in initial years but want to go for a foreclosure in say 24-36 months.

[nerd1200]

That's a good move by Mercedes and something that could potentially bring more customers into their brand (read: wooing customers away from BMW, Jaguar & Audi). For salaried people, the proposition is - pay the same EMI as any 30 lakh rupee car for longer and own a Merc now. However it's not something I would go for due to obvious reasons.

Personally I feel 4-5 years is okay and 7 years max if your heart is really set on a car. I know it might be a polarizing opinion but think about it this way: My savings account may not allow me to buy an Octavia vRS 245 now. But knowing that it's a limited edition car, I could go for a 7 year loan without impacting my finances all too much.

[swapnil.awate]

Voted Yes.

Since the brand is aspirational and I always own cars for 10+ years. Tailor made scheme for someone like me whose brain fades after seeing a good car!

[nikhilarni]

Originally Posted by Shreyans_Jain

I honestly believe that if you can’t buy the car on a straightforward 3 year loan, you can’t afford that car.

I totally agree, Shreyans. If you cannot pay back the loan within 3 years, you just cannot afford it.
Being married to a chartered accountant, keeps me grounded and she puts in the numbers on excel before any purchase. Its astonishing how banks and lenders come up with such schemes which seem so lucrative to the average Joe.

No wonder most of the banks now have swanky buildings and infrastructure. No points for guessing, where the money is coming from

Originally Posted by GTO

If you need a "10 year scheme" to buy a Mercedes, you can't afford it.

A fool and his money parted, honestly.

Totally Agree, GTO sir.

It reminded me of a conversation I had about 15years ago (when I had passed out of engineering and just started my career) with a neighbor who had probably failed in college or something and started working in a call centre.

His entire conversation centered around buying a Honda Civic, saying that his call centre job would easily afford the installments and some nonsense around it. I was having fun just listening to his crap, all the while thinking about the very same thing. A food and his money are soon parted.

Originally Posted by roby_dk

I get nightmares thinking of a house loan of 10 years and for a depreciating asset like car it is way too much. Car loan for 3-4-5 years is justified, in 10 years you will pay almost double amount of the actual car cost. Better to buy a car 1 or 2 segment below with maximum down payment.

True. Most people don't really put in numbers on excel or any spreadsheet to really understand what they are getting into. They'd only look at the EMI amount and think, "Oh, that's affordable", " I can pay that". At times, they don't even read the EMI per Lac.

People don't even understand that a car is a depreciating asset to begin with.

[skatte]

Voted No, but this may work with some people. A few years back, a colleague probably taking home about 40K a month bought a Toyota Corolla on a 7-year loan.

There are people out there who get excited and take the plunge when they're given a way to buy their dream product. Affordability Math does not work there!

On another note - that Corolla is still with him. All of us who were laughing at this purchase have changed cars once/twice and we still don't drive something half as good.

[lamborghini]

10 years for a car loan is entering housing territory!

Will they launch EMI schemes for service and maintenance too?

Some thoughts from article & post:
- 13% is a ridiculous amount of interest to pay - by the end of it, you're paying nearly 80% of the loan value in pure interest.
I get that many people aspire to own a Mercedes, but investing the same amount for a shorter duration may just get you the Mercedes interest free ( related thread (Dream Car Fund - Do you have one?) )

- If you absolutely must have the car NOW - find a well maintained 2-3 year old example for 40-50% of the price. Get something within warranty so all issues can be fixed before moving on to a cheaper but equally competent independent mechanic
For instance: a lot of clean, low mileage W212 E Classes trading hands at 20-30L compared to a new C-Class at 45L.

- A Rs. 40L loan on a C-Class would be around Rs. 60,000/month for a 10 year period, v/s around 88,000 for a 5 year period.

- Maintenance isn't cheap!
Our C220d has required around Rs. 1.5L worth of service expenses in the first 3 years + a host of parts changed under warranty. This is a car that's not even completed 20,000kms!
If you drive moderately (10,000kms/year), expect first 3 years service + maintenance (including tyres, brake pads, etc.) to be around Rs. 2L.
Shoddy reliability & expensive parts made me ask the Mercedes dealer for a quote for extended warranty - a whopping Rs. 4 lakhs for 3 years (granted I asked him a week before warranty expired, but even then it's ridiculously priced!)
If you're buying an aspirational car with a 10 year loan, you need to make sure to have the reserves for maintenance as well + body work.

- Depreciation: After paying nearly 80L for a Rs. 50L C-Class, 10 years later you'll be struggling to sell it at prices as low as Rs. 4-5L. That has to hurt at some level!

[androdev]

Are we in a car forum or in a CA-club I don't know the small print but such flexibility is welcome if someone dreams to own a nice car while his knees are still in good shape and he has a good handle on his finances. There is a season to do certain things in life - and if calculated risks are taken, such decisions can turn out to be very rewarding.

[Akhileshmdp]

Perhaps the takers could be Corporations who resort to such vehicles in any case, the outflow would be an expense bringing down the tax liability, would need to do the complete math though, e.g. Hotels, Car rentals, of course with Covid around equations have changed drastically for them.

[atulanand13]

Originally Posted by Shreyans_Jain

I honestly believe that if you can’t buy the car on a straightforward 3 year loan, you can’t afford that car. And a 10 year loan on something that depreciates as fast as a premium car is sheer stupidity. 2 new generations of the car would be out by the time your EMIs end, and by then your car will be worth nothing. Oh and if it is diesel, it will simply not remain road legal after your 10 EMI paying years.

All these schemes are ultimately just that, and the buyer ends up coughing a significantly higher amount in total at the end. Of course, marketing people have to do their jobs, but we have to be fiscally prudent.

Totally agree with your comments here.
1. Depreciation on a premium car makes it useless few years down the line.
2. 10 year loan for a depreciating asset is a financial suicide. Fiscal prudence all goes for a toss.
3. You will still have to maintain your car nevertheless and paying for that will burn another hole in your pocket.
4. It just satisfies the targets of these companies by fooling the gullible people who get allured by the seemingly affordability of the car.

It's better to buy a pre owned luxury car if at all it has to be bought.

[VJ05]

It's clear that MB is targeting the customer segment who is looking to buy Fortuner/Endeavor/Superb etc. but have the aspiration for C segment or who's buying C class as he can't afford E class and so on. 10 year tenure will lower the EMI's and make it bit affordable. That's about it.

[laser2707]

While I voted "No" what I really meant was no loan at all. These are very uncertain times we live in and financial prudence lies in cutting out expenses. EMI's are one big outflow in everyone's budget.

Pay off loans, cut down expenses. As for the Merc. You can put a screen-saver of the latest Mercedes AMG GT-R. That will be far more satisfying than an 80 lakh car quietly chipping away at your equity.

[landcruiser123]

The more I read about personal finance, I realize that the car is the single worst investment you can make as a salaried individual.

Question for the experts: With a 10 year term, at what point will the value of the car be less than the outstanding payments? Can this lead to any kind of fraud? Reference:https://www.team-bhp.com/forum/india...ce-claims.html (Indian car owners damage their cars for bogus insurance claims)

[AutoSphere]

I voted "No" because my rule of thumb is car-loan less than 1/3 of your annual salary for a tenure of 3 years and house loan no more than 3 times your annual salary for a tenure of 10 years.

Ten years is a long term for a car-loan and the interest rate is high as well.

Also, there is quite a bit of uncertainty in the transportation/commuting sector with IC vs Electric, personal car vs taxi, Work from Home, etc. So who knows how the world is going to be 3 years from now, let alone 10 years. Typically, a person who buys a car on loan would not want to be stuck with an expensive asset like a luxury car.

[Sebring]

Voted yes. In these uncertain times who knows what's in store tomorrow, forget 10 years! So let me enjoy. But on a different note, will we have something called as 'fossil fuel' in 10 years? Remains to be seen