[Dry Ice]

After most auto majors trying to get into the car lease space, we now have another new entrant. With a difference though. This startup is going to lease used cars, to both individuals and corporates.

They have started operations in Delhi and will soon expand to Bengaluru,*Hyderabad, Mumbai &*Pune.

PumPumPum is seamlessly taking care of all the used car owner’s risks such as repair, maintenance, tyres, batteries, car resale value, insurance etc; thus, ensuring a safe and comfortable travel with hassle free ownership.

Ranging from monthly subscriptions of ₹10,000 to ₹1 lakh, PumPumPum car subscriptions are dynamic based on duration of subscription. Witnessing a huge demand for luxury cars in the segment, the company is also planning to offer Used Luxury Cars in the leasing format. Currently its services are available in*Delhi-NCR and has aggressive plans to reach out to newer markets including Bengaluru,*Hyderabad, Mumbai &*Pune.

All the cars are IoT enabled cars (OBD device) which captures customer driving behaviour & car health parameters. IoT enabled cars add smart features to economical cars which are easily accessible by the user through the PumPumPum app. The company is applying machine learning to reduce maintenance cost by taking a preventive course with the help of data received through IOT. Real-time credit check allows the user to get rid of lengthy banking and loan process along with a lot of paper trail.

Source

Their website - https://www.pumpumpum.com

Some FAQ from their site

For how long can I subscribe a car?
You can subscribe to a car for a minimum period of 6 months which can go up to 24 months. The longer you subscribe for, the lesser is your monthly subscription fee.

Is there a KMs limit to how much I can drive?
Yes, there is a monthly limit of 1500 kms. for a full month subscription. You can still drive beyond the kilometer limit, but the additional kilometers clocked will attract an additional charge depending upon the car you subscribed for (Small hatchback to SUV additional charge will range from Rs 8/km to Rs 15/km). The kms. will accumulate on a pro-rata basis for the period of your subscription (e.g. if you subscribe for 6 months, you will be entitled to 9,000 Kms, beyond which there will be an additional charge per km)

How does pumpumpum ensure that the car condition is good ?
We procure high-quality used cars after the car matches our 200-checkpoint inspection criteria. After procuring the car, it undergoes a complete overhaul in mechanical and aesthetic terms. All our cars are scratch-free and dent-less.

What is included in the monthly fee I pay?
The payment includes subscription fee, insurance, service and maintenance and an OBD-device annual subscription fee.

What is included in maintenance?
1. Standard service every 10000 kms.
2. Tyres (after one complete lifecycle of the tyre)
3. Clutch plate change at recommended kilometres by OEM or recommended kilometres by PPP mechanic & workshop department.
4. Engine timing belt at recommended kilometers by OEM
5. AC gas refuelling
6. Brake pads
7. Other standard consumables as recommended in the service book.

What is excluded in maintenance?
1. Suspension function (as it depends upon the driver )
2. Before delivery of the car, PPP workshop department gives a range of kilometres after which clutch plate needs to be changed and if a subscriber uses the clutch in an anomalous way, relevant amount will be charged against the subscriber.
3. Alloy wheel cracking or tyre damage.
4. Consequential damage due to non-adherence to the shared service schedule.
5.Wear and tear (e.g. Premature replacement of consumables such as tyres, clutch plates, brake pads and discs etc.)
6.Major dents and scratches on the exterior are excluded in maintenance cover. Minor scratches that are considered normal are taken care of by us.
In all cases, we will assess such charges in a fair and transparent manner.

What if I return my car in the middle of a monthly billing cycle?

The minimum lock-in period depends on the category of the car and the period for which it is subscribed. Let's suppose an individual subscribes to a car for 9 months and the car has a lock-in period of 6 months. If he/she wants to return the car in just 3 months, then he/she has to pay for the remaining lock-in period left, i.e, for 3 months added to the difference between the cost of monthly subscription for 9 months and 6 months ( as subscription cost reduces for longer duration).

The available options in Delhi NCR as of writing this post.

• 2013 Hyundai - I20 - Magna 1.4 Crdi - INR 13,125*/*month
  
• 2016 Maruti Suzuki - Alto K10 - Vxi - INR 11,915*/*month
  
• 2017 Renault - Kwid - 1.0 Rxt Opt - INR 14,260*/*month
  
• 2016 Maruti Suzuki - Swift - Vxi - INR 16,132*/*month
  
• 2015 Hyundai - I10 - Magna 1.2 Kappa2 - INR 12,870*/*month
  
• 2012 Honda - Jazz - X - INR 13,757*/*month
  
• 2015 Volkswagen - Polo - Comfortline 1.2l (P) - INR 17,479*/*month
  
• 2014 Honda - Mobilio - V Diesel - INR 19,612*/*month
  
• 2013 Maruti Suzuki - Ertiga - Zxi - INR 19,801*/*month
  
• 2013 Volkswagen - Vento - Comfortline 1.5 (D) - INR 18,238*/*month
  
• 2013 Mitsubishi - Pajero Sport - 2.5 Mt - INR 37,054*/*month
  
• 2015 Ford - Ecosport - Titanium 1.5 Ti-Vct - INR 22,977*/*month
  
• 2016 Mahindra - Kuv100 - K6 D 5 Str - INR 16,071*/*month

Some AT options

• 2014 Ford - Ecosport - Ambiente 1.5 Tdci - INR 20,200/month
  
• 2016 Hyundai - Grand I10 - Asta At 1.2 Kappa Vtvt - INR 19,702*/*month
  
• 2015 Honda - Jazz - S At - INR 18,574*/*month
  
• 2015 Maruti Suzuki - Celerio - Vxi Amt - INR 12,633*/*month
  
• 2014 Volkswagen - Polo - Gt Tsi - INR 20,040*/*month
  
• 2014 Audi - A6 - 2.0 Tdi Premium - INR 86,835*/*month

[dark.knight]

I'll start off with the negative first, yet another startup with a silly name *putting it politely*, joining OYO, OLA, Zomato, Swiggy etc. Do they all visit kindergartens for naming ideas?

The good is that, its good to see some entrepreneurial adventures in these times of crises, and while a used car leasing business might just be what the occasion calls for, I don't think this will succeed either, and will eventually go the Zoomcar route.

The rates are high, yes I know when one factors in maintenance and replacement costs it wont be so high after all but, India just isnt the place for leasing/renting stuff, I know I'll never take good care of a house or car if rented, and I certainly hate paying monthly electric bills, leave alone rent or lease, we are tuned towards one time payment and long retention, unlike the North American mentality of small bullet payments over shorter retention.

Audi A6 at approx Rs.87k is a good deal p.m, for the maximum tenure of 24 months it'll cost just over 20 lacs with 1 free maintenance thrown in, but I'll be crying every time I write a cheque for Rs.87k or I'm docked Rs.87k, plus it's used to begin with so no bragging rights anywhere to be had, other than the fact that I'm driving a great car. Its certainly cheaper than outright owning a NEW one, thats for sure.. but if I buy used A6 at between 18-31 lacs (Carwale prices for 2013-2018 models) and resell at about half that price, I may just save a couple of lakhs in the process even with maintenance+cleaning+tyre change).

As I've always said, more middlemen may create more employment and earning opportunities, but the cost to the consumer only goes up, they do need a healthy profit afterall.

Edit : I dunno about you all, but I drive about 700 km a month and even I wouldn't want a restriction of driving range per month, leave alone people who drive much more than I do.

[headbanger]

Though I wish for more such businesses to come, I feel the high rates will be deterrent to success of this model.

But full marks to the name of the company- Pumpumpum. Loved it!!!

[lamborghini]

I too feel the rates are on the higher side.
A person paying 87k for 24 months on a 2014 A6 can actually look at purchasing the vehicle on a slightly longer term loan for a similar outflow, and with a 5 year loan he may be able to get his hands on a newer A6 (though the down payment will have to be forked up).
Yes he will have to bear an additional maintenance cost of around ₹35-70,000/year (not including failures and the like which apparently may be billed to the consumer - the company is quiet on electronic niggles like sensors, etc.), Or in the case of a new vehicle it will have manufacture warranty, no KM restrictions, etc.

But at least he has a vehicle, and if he were to sell it, his total outflow would be much cheaper than a lease model (factoring resale).
In my opinion, It could work on shorter term rentals (up to 6 months) if their pricing was cheaper than other rental options.

[SKC-auto]

Looks very costly, paying 12000₹ for a decade old 1st gen i20 for 24 months is just not acceptable to me.

Even taking personal loan and buying the same i20 for 2 lakh will be cheaper even with insurance and minor maintenance. They should have limit to leasing 5 year old cars instead of leasing decade old cars.

[audioholic]

Atrocious pricing for what they are offering. There is a limit on the number of kms, there is no coverage of suspension components(which is a big expense that occurs in these cars), specifying clutch life by the company(how on earth is that determined). If we buy these used cars and sell after two years, the depreciation hit is lesser than the expense occurred by leasing the cars. For a seven year old ertiga petrol, which might fetch around 5L in the market, I have to pay 2.4L for two years. Instead if I buy this car, and sell it after two years, worst case I can still get 3-3.5L or even more who knows. Of course, it depends upon the car condition when we pick it. If we get a good car, keep it in good shape, the depreciation hit for an already old car will be lesser. Same way, a bad car can be brought at a lower price and the same ramp continues.

And what a name, seems like one derived from an intoxicated ideation session

[balenoed_]

Setting up for a failure seems like. Even the major ones like Zoom, Revv are planning a similar strategy which they call as subscription model. The rates are pretty much same and they have more options.

And these prices seems to be more than what one would pay EMI on a used car loan.

[fazayal]

I would not touch any of these cars to use even with a gun on my head. The business model is wrong and any person with a working brain would stay away. Many points against it and none in its favour.

1. Just looking casually on pre owned car websites, I can see that an Alto VXi of 2016 would cost around 2.5 lakhs in Delhi. If I buy this car even with a personal loan of 11% interest for a period of two years my EMI would be less than what they are asking for! It would be lesser if I buy through car loan.

2. Now after two years I can sell this car and recover at least 50% of the price of the car if not more. So the economics doesn't make sense at all. It would be similar for other cars as well.

3. On the maintenance part they are offering only limited protection on what they would cover on maintenance. These are second hand cars with God knows how many kilometers run (they have cleverly not specified that) and how they were maintained by previous owner or why they were sold. Just imagine one of the cars getting engine or gearbox troubles which they would not pay for. Customer would be in soup. Also if you drive in cities, clutch and brake components would have to be replaced "pre maturely" in most cases, whose bill you would have to foot. So in all. Other than 4-5k annual service expense, they won't be bearing anything else on service.

4. Just 1500 km per month allowed kms come out be just 50 kms per day. It is actually very less and per km cost after crossing this quota is pretty high. Needless to say OLA/Uber is much more economical if you drive less than 50 kms a day. You get a chauffer driven car with no maintenance, no fuel cost and no accidental expenses.

5. Dents and scratches, whether they are major or minor are subjective and totally up to them to decide. You can't avoid dents and scratches in Indian cities. Every user would get a fat bill when they would surrender the car. Also not sure what's covered in insurance and what's not. I won't be surprised if these cars only have third party insurance and every damage would be liability of the user.

I am all ears if anyone has any positive point.

[aargee]

I looked at a different way...

2013 Hyundai - I20 - Magna 1.4 Crdi - INR 13,125/1500 Km = Rs 8.75/Km
2016 Maruti Suzuki - Alto K10 - Vxi - INR 11,915/1500 Km = Rs 7.94/Km
2017 Renault - Kwid - 1.0 Rxt Opt - INR 14,260/1500 Km = Rs 9.50/Km
2016 Maruti Suzuki - Swift - Vxi - INR 16,132/1500 = Rs 10.75/Km
2015 Hyundai - I10 - Magna 1.2 Kappa2 - INR 12,870/1500 = Rs 8.5/Km
2012 Honda - Jazz - X - INR 13,757/1500 = Rs 9.17/Km
2015 Volkswagen - Polo - Comfortline 1.2l (P) - INR 17,479/1500 = Rs 11.65/Km
2014 Honda - Mobilio - V Diesel - INR 19,612/1500 = Rs 13.07/Km
2013 Maruti Suzuki - Ertiga - Zxi - INR 19,801/1500 = Rs 13.2/Km
2013 Volkswagen - Vento - Comfortline 1.5 (D) - INR 18,238/1500 = Rs 12.15/Km
2013 Mitsubishi - Pajero Sport - 2.5 Mt - INR 37,054/1500 = Rs 24.70/Km
2015 Ford - Ecosport - Titanium 1.5 Ti-Vct - INR 22,977/1500 = Rs 15.31/Km
2016 Mahindra - Kuv100 - K6 D 5 Str - INR 16,071/1500 = Rs 10.71/Km

Just for comparison - My SCro Brownie has clocked 60464 Km for which cost of ownership per Km is Rs 7.31/Km including fuel, insurance, toll & service. If you exclude fuel cost works to Rs 3.19/Km

[fazayal]

Originally Posted by aargee

I looked at a different way...

Just for comparison - My SCro Brownie has clocked 60464 Km for which cost of ownership per Km is Rs 7.31/Km including fuel, insurance, toll & service. If you exclude fuel cost works to Rs 3.19/Km

Also, these are 7-8 year old cars. The per km maintenance costs would be much higher than for a new car.

[Dry Ice]

Originally Posted by dark.knight

I'll start off with the negative first, yet another startup with a silly name *putting it politely*, joining OYO, OLA, Zomato, Swiggy etc. Do they all visit kindergartens for naming ideas?

Originally Posted by headbanger

But full marks to the name of the company- Pumpumpum. Loved it!!!

Originally Posted by audioholic

And what a name, seems like one derived from an intoxicated ideation session

The founders maybe a Kishore Kumar fan. Listen 0:40 onwards.

https://youtu.be/ky0yYmuG_hE

[pannags]

I remember a somewhat similar offering from ZoomCar with one crucial difference - the cars being offered were brand new. Was later given to understand that there were hardly any takers because of which the plan never really took off.

Pompompom must be under a spell to imagine that they will be able stay afloat, unless they offer discounts similar to what we used to get on Standard firecrackers. (for those not familiar, the usual range is 70%-90%)

[aargee]

Originally Posted by fazayal

Also, these are 7-8 year old cars. The per km maintenance costs would be much higher than for a new car.

I had bought a 3 year old WagonR, owned it for 11 years before buying my SCro. I had its record for little over 3 years (8-Feb-2014 to 19-Mar-2017) & nearly 15000 Km (14992 to precise; ODO read 67760 to 82752). The ownership cost per Km (including insurance, toll, fuel, maintenance) worked to Rs 5.11 per Km.

[fazayal]

Originally Posted by aargee

I had bought a 3 year old WagonR, owned it for 11 years before buying my SCro. I had its record for little over 3 years (8-Feb-2014 to 19-Mar-2017) & nearly 15000 Km (14992 to precise; ODO read 67760 to 82752). The ownership cost per Km (including insurance, toll, fuel, maintenance) worked to Rs 5.11 per Km.

Don't think toll amount should be added in ownership cost!

[govigov]

Originally Posted by aargee

Just for comparison - My SCro Brownie has clocked 60464 Km for which cost of ownership per Km is Rs 7.31/Km including fuel, insurance, toll & service. If you exclude fuel cost works to Rs 3.19/Km

Thanks RG, here with pumpumpum, they have excluded major repairs, cluth wear and suspension, and your calculation includes that.

They have also not talked about how to deal with an accident scenario, whether they will take care of everything end to end, or whether the leasee has to shell out something from the pocked. Considering that they said major damage will have to shelled out from the pocked of the leesse, not so hopeful.

If this was all frills included, no additional charges to the leesee, then it would have been OK.