personal finance

Soon, you can book Maruti cars by paying 10% less down payment


NEW DELHI: Maruti is teaming up with banks to lower the cash outgo that you pay for buying a new car. With vehicles getting expensive over the past few years and banks insisting on higher financing from customers, the company has worked out a special scheme — part of a pilot project at the moment — wherein a customer stands eligible for higher financing for the on-road price, which directly results in less down payment from a customer’s pocket.

For an entry-level car that may cost around Rs 4.5 lakh on-road, the benefit due to the measure — which may reduce a customer’s down payment from 20% to as much as 10% — is estimated at Rs 40,000-45,000.

Shashank Srivastava, director (marketing & sales) at Maruti Suzuki, said that the scheme has been launched jointly with Kotak Mahindra Bank from January 1 this year, and the pilot will run till the end of the current quarter. “As market leaders, it is our duty to work towards the revival of the industry and through this initiative, we are trying to reduce some of the burden that the customer is facing due to higher vehicle costs and enhanced down payment obligations,” Srivastava told TOI. “Down payment will be lowered by 5-10% of on-road price through this.”

While Kotak is the first bank to introduce the measure, Srivastava said Maruti is in talks with 4-5 other “major banks” to work out similar measures. “We have been in touch with the industry to work upon ways to turn around the industry. We feel that this step may help customers, especially those buying the entry-level vehicles.”

Currently, banks on an average finance nearly 80% of the on-road price of a car, while the rest has to be paid by the customer as down payment. With cars getting expensive due to requirements of stricter safety and emission norms, the load on the customer has gone up significantly over the last one year.

Also, following the NBFC crisis and the increased efforts by banks to reduce NPAs, financing has become difficult, and expensive. Banks are often reluctant to lend freely, and have been trying to prompt customers to pay more as down payment.

During a meeting with top government functionaries, Maruti had identified financing as a key reason for the slowdown, which prompted the officials to suggest partnerships with banks, including SBI and Kotak Mahindra.





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