[TusharK]

Volkswagen has patterned with Orix Auto Infrastructure Services Ltd. to offer a subscription-based car ownership model to its customers.



The subscription-based service will be available at 30 outlets across Delhi-NCR, Mumbai, Pune, Ahmedabad, Bangalore, Chennai, and Hyderabad. Orix & VW will provide its customers 100% on-road financing, periodic maintenance, insurance cover and an option to upgrade or return the car after the end of the lease tenure.

Customers have the option of three cars - Polo, Vento and T-Roc. The all-inclusive monthly subscription fees are Rs. 16,500, Rs. 27,000 and Rs. 59,000, respectively. Customers can subscribe to the cars for a tenure of 24, 36 or 48 months.

Link to Team-BHP News

[tsi_niks1989]

This leasing thing does not works out well in India. Price quoted for Polo of 16,500 INR would be for the base model 1L MPI engine which one can get for approximately 7L on road depending on different road taxes.
If a person purchases the subscription for say 2 years, he/she would be paying 3,96,000 INR in total. Why would I pay more than half a price of the car for just 2 years of ownership?

[sid_deb]

Originally Posted by tsi_niks1989

This leasing thing does not works out well in India. Price quoted for Polo of 16,500 INR would be for the base model 1L MPI engine which one can get for approximately 7L on road depending on different road taxes.
If a person purchases the subscription for say 2 years, he/she would be paying 3,96,000 INR in total. Why would I pay more than half a price of the car for just 2 years of ownership?

This only makes sense when you get tax benefit from company. Doesn't make sense otherwise as you have rightly pointed out

[kimmig]

Companies like Orix etc have basically killed the car leasing model in India with their greedy mathematics. Have done the calculations several times, it does not make sense, looks like they want to keep all the tax benefits to themselves, plus enjoy the depreciation benefit of the car by keeping it on their books.

[HooghlyBoy]

Looks like Disaster waiting to happen with VW India in lines of Ford India. This is where Desi companies score over MNCs. One needs to understand the mindset of Indian Customer. Though Kolkata isn't in the list but any sane person will buy a 3-4 yr pre-owned Polo (HL/CL) at same price paid for the subscription here rather than spending such outrageous amount. Subscription route will be lucrative to consumers in case of Electric Cars as people might pay for a 1-2 yr experience before taking a Car Loan to buy a new technology.

[GTO]

Originally Posted by tsi_niks1989

If a person purchases the subscription for say 2 years, he/she would be paying 3,96,000 INR in total. Why would I pay more than half a price of the car for just 2 years of ownership?

To a business in the 30% tax bracket, it would cost about 2.75 lakhs. And that includes insurance & maintenance (easily worth 50 - 60 grand). Not bad for short-term ownership, but yes, leasing in India will only pick up when the manufacturers commit to it like in the USA. Lease deals in the USA are stupid cheap.

Only reason manufacturers aren't doing that here is they still don't know (or want) how to handle all the off-lease cars at the end of 2 - 3 years. Selling them can be a headache.

Plus, from Maruti & Hyundai's POV, why fix something that isn't broken? Indians who want to buy a car are happily doing so with finance.

[adithya.kp]

In the subscription model, does one get a brand new car ?

[tsi_niks1989]

Originally Posted by adithya.kp

In the subscription model, does one get a brand new car ?

Both the options are available for the customer depending upon the company from where you are leasing the car. Like if I buy from Toyota/Hyundai/Maruti, they place an order for the car, get it registered on my name and then deliver it based on the availability. White number plate cars would be allocated if we decide to keep the car on our name or a Black number plate if on leasing company's name.

Other leasing options available on Revv, Zoomcar offer an option where we can select either a brand new car or an unboxed car.

[DeKay]

Originally Posted by GTO

To a business in the 30% tax bracket, it would cost about 2.75 lakhs. And that includes insurance & maintenance (easily worth 50 - 60 grand). Not bad for short-term ownership

50-60 grand for the first 2 years of maintenance on a Polo? How?
It isn't going to be more than 25, tops. I didn't spend that much even on the Jetta in its first 3 years.

No matter what, the economics just don't work at these prices. Even for a business, financing a car outright makes way more sense.

[ike]

Originally Posted by DeKay

50-60 grand for the first 2 years of maintenance on a Polo? How?
It isn't going to be more than 25, tops. I didn't spend that much even on the Jetta in its first 3 years.

The first couple of years insurance alone would be about 40 to 50k isn't it? 2 years maintenance + insurance premium would be more than 25k definitely.

There is a factor of convenience that is on offer, you don't have to spend on anything apart from fuel. But is it worth this kind of premium? I'm not sure. Do they also sell it back to the Lessee at the end of the term at depreciated value?