OTO signs up 40 auto dealers in Pune; aims to lease 5000 two-wheelers by end 2020

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Pune, 1 July 2020: OTO Capital, India’s first 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.

OTO features the My OMI Plan leasing option for customers to purchase two-wheelers of their choice at any dealer showroom. With the My OMI Plan, customers can walk into any two-wheeler showroom, get an instant approval and ride home their brand new vehicle under 30 minutes with zero paperwork. Under the plan, customers pay a low down payment, as little as INR 5000 which is refundable and OMIs (Ownership Monthly Installments) that are 30% less than existing two-wheeler loan EMIs. Customers can choose the tenure of their OMIs, which ranges from 1-3 years. At the end of the chosen tenure, customers have the flexibility to walk away with no obligation, or upgrade to another brand-new vehicle, or make a simple balloon payment to retain the same vehicle. Buyers also get a convenient, all-inclusive OMI that includes bumper to bumper insurance and maintenance.

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. OTO Capital also facilitates completely paperless transactions, handled remotely by their executives. The shutdown of public transport has made it very difficult for people commuting to work, which is also forcing them to opt for affordable two-wheelers. 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.

With green shoots appearing in a post-lockdown revival, OTO is enabling Banks and NBFCs to serve a newer and wider set of customers who were earlier shying away from vehicle loans.  OTO partners with Banks and NBFCs to provide the capital and provides a full auto-lifecycle management, from credit underwriting to insurance, maintenance and eventual resale of the vehicle. Partnering with OTO helps traditional and large banks to offer flexible models of ownership and incentivize the new-age buyer by offering an all inclusive package. It gives vehicle loan departments of banks an opportunity to quickly move into vehicle leasing without any change in their internal processes.

Sumit Chhazed, Co-founder, OTO Capital, said, “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.”

Manish Shah, Parineeti Honda, Pune, said, “We are very happy to partner with OTO Capital, which is helping us lease two-wheelers to our customers in Pune. Buyers are asking for affordability, convenience and compliance with COVID19 guidelines. Many of them are looking at midrange models that they can change in 2 years’ time. OTO has been able to provide all of these benefits to our customers. We have seen good pickup in the last 2 months. Now we actively inform our customers about the leasing option and they are definitely interested in trying it out. ”