EMIs are nothing new, but when used in combination with a lease and subscription model, the deal becomes a lot more attractive for customers. Lease and subscription model is used for various products and services, but its usage in automobile sector is relatively new.
However, this system for cars is fast gaining popularity, especially at a time of sluggish sales and rising cost of ownership. To boost revenues, Honda has launched a similar scheme called Smart EMI in association with TranzLease.
One of the best things about Honda’s Smart EMI is that monthly instalments are significantly less, as compared to standard car loan EMIs. The EMI amount is reduced from first month itself, as the resale value of the car is deducted from the price of the car to calculate the EMI. Another benefit is that cost of insurance and standard maintenance is covered under Smart EMI scheme. This further reduces the financial burden on customers.
Honda’s Smart EMI also covers unplanned maintenance cost and risk of fluctuation in resale value. Moreover, customers don’t need to face the hassle of finding the right buyer for their old car. At the end of the tenure, the customer can either retain the car or return it to the leasing company. In case the customer chooses the retain option, they just have to pay the resale value of the car, as mentioned in the contract document.
In case of return, customers can get any surplus amount received above the resale value of the car. Depending on the type of scheme, customers will also get guaranteed bonus and good drive bonus. Since everything is managed by the leasing company, it ensures a hassle-free experience for customers. You may just need to sign a few documents to avail this unique EMI scheme.
Customers opting for Honda’s Smart EMI are also eligible to earn money through referrals. If they refer someone who also chooses Smart EMI, they can get referral bonus. Customers can make multiple referrals and earn bonus for each successful referral.
Initially, Honda has introduced Smart EMI option in Delhi-NCR and Mumbai. In the next phase, the scheme will be launched in other cities such as Bengaluru, Chennai, Pune and Hyderabad. If the response is good, Honda may introduce the scheme pan-India.
Smart EMI appears to be a revolutionary car ownership system that creates a win-win for all stakeholders. It benefits customers at both ends of the spectrum, one that is looking for reduced ownership costs and another that wants to try something new after a certain period. However, it remains to be seen if the scheme turns out to be as good as it looks on paper.
