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Signs up 30+ new dealers in the city; Aims to Lease 10000 two-wheelers in 2021

OTO Capital, an alternate finance startup for purchasing two-wheelers, has reported a 330% increase in consumers opting for vehicle leasing to finance their two-wheeler purchases.

Additionally, over 30 new automotive dealers have signed up with OTO Capital, making it a total of 90 dealers who provide vehicle leasing as an alternative model of financing to their customers in Bengaluru.

With the success of its completely online model and increasing demand from dealers, OTO is going live in more than 30 partner showrooms to provide OTO’s flexible ownership plan to their walk-in customers.

OTO aims to provide the OTO Flexible Ownership Plan to at least 10000 customers in Bengaluru in 2021.

Bank loans

With the automotive industry seeing green shoots of revival, the demand from consumers has increased with many buyers enquiring about leasing options instead of vehicle bank loans. More than 700 two-wheelers have been leased in Bengaluru in the last 3 months and the city has contributed to 60% of overall online sales for OTO.

The buyers in Bengaluru fall under the age group of 34 with 84% being male customers. Post the pandemic, OTO has seen an increase in the number of self-employed professionals opting for vehicle leasing.

The city 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.

On average, 70% of the sales are for scooters while 30% are bike purchases. There has been a surge in demand for scooters and early entrant bikes priced below Rs 1 Lakh.

Dealers cooperation

The most commonly leased brands among scooters are Honda Activa, Suzuki Access, Okinawa Praise and among the bikes Honda SP 125 and Honda Unicorn are popular. Dealers are now actively recommending vehicle leasing to customers who are wary of taking long-term bank loans during uncertain times.

OTO is currently available at more than 160 dealers across Bangalore, Pune, Hyderabad & Chennai. It has financed more than 2000 two-wheelers worth over Rs 17 crore in 2020. It is adding more than 500 customers per month and plans to grow 10X this year.

Even in the Electrical Vehicle (EV) segment, OTO is seeing significant growth with all major brands such as Hero Electric, Piaggio, Okinawa and others partnering with the company to offer better financing options for their buyers.

The OTO leasing model is the most affordable and flexible model available to consumers today. The main benefit of OTO is that one can save up to 30% through OTO Monthly Installments (OMI) compared to a traditional bank loan EMI.

Paperless transaction

The buyer has complete control over the ownership and can choose to lease the vehicle between 12 months to three years. At the end of the leasing period, one can also buy back the vehicle from OTO or upgrade to any other vehicle of their choosing.

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.

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.

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.

Flexible ownership

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.

Expressing happiness over the company’s expansion, OTO Capital Cofounder Sumit Chhazed the company is pleased to report steady growth in Bengaluru since the end of the lockdown.

“Many customers are looking to buy two-wheelers and are showing a keen interest in alternative finance options such as OTO for the affordability, quick turn-around and flexible options,” said Sumit Chhazed

Sumit Chhazed said many dealers have also signed up with us to offer this flexibility to their customers.

“Customers are now able to choose the model of their choice and brand without making any compromise while keeping their costs low. We are bullish about Bengaluru and will soon be open to other cities in the region and sign more dealers in the city and surrounding towns,” said Sumit Chhazed.

VFM Honda Managing Director Mandeep Chand said since October the company has seen a lot of customer interest in two-wheeler purchases and many are actively inquiring about leasing as an alternate finance option.

Contactless transaction

“Since the pandemic, we are also getting enquiries on contactless transactions and home delivery of the bikes. OTO Capital has been able to provide all these benefits to our customers. We are very happy to partner with them to lease two-wheelers in Bengaluru,” said Mandeep Chand.

OTO offers a new model of financing for two-wheeler purchases and is targeted at retail customers. OTO finance plan features OMIs (Ownership Monthly Installments) which are 30% lower than EMIs and low, refundable down payment.

Founded in 2018 by IIT-Mumbai alumnus Sumit Chhazed and Harsh Saruparia, OTO partners with Banks and NBFCs to provide the capital offers customers with an alternative option for financing their vehicles.

OTO provides full auto-lifecycle management, from credit underwriting to insurance, maintenance and eventual resale of the vehicle.

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