Maruti Suzuki & ICICI Bank are aiming to provide easy car loan options.
Each of the three schemes come with different loan repayment options.
Offer is available on select models buying Maruti Suzuki cars starting May 2020.
Maruti Suzuki has tied up with ICICI Bank to offer retail financing options with the idea to support prospective buyers impacted by the ongoing COVID-19 pandemic. With Maruti Suzuki's over 3,000 outlets across India, and ICICI Bank's extensive network of over 5,380 branches across India, the schemes is expected to benefit customers of all profiles who are willing to buy a car.
ICICI Bank is also providing 100 per cent on-road funding for all Maruti Suzuki cars. As a part of this partnership, three financing schemes have been launched, as detailed below:
Step-up EMI Scheme: Under this option, customers can increase the EMI amount by up to 10 per cent every year as their income grows. The EMI could start from Rs 1,752 per lakh in the first year of repayment and increase by 10 per cent every year for a loan tenure of five years. This scheme is applicable to all Maruti Suzuki cars.
Flexi EMI Scheme: It enables customers to pay low EMI initially to help them overcome the financial challenges caused due to the COVID-19 pandemic. The EMI amount starts from Rs 899 on a loan amount of Rs 1 lakh for the first three months. Thereafter, the EMI amount is higher. This scheme is applicable to all Maruti Suzuki cars.
Balloon EMI Scheme: Customers are required to pay an EMI of Rs 1,797 per lakh during the tenure, barring the last installment when they pay one-fourth of the loan amount. This is beneficial for customers who prefer paying lower EMIs throughout the loan tenure. This scheme is valid on the Alto, WagonR, Ignis, Swift, Baleno, and Dzire.
Note: The above offer is available on select models and for select customers buying Maruti Suzuki cars starting May 2020.
Speaking about the initiative, Shashank Srivastava, Executive Director, Maruti Suzuki, said, “While fighting the prevailing COVID-19 crisis we also need to help customers with attractive auto retail financial solutions. Low down payment and low EMI products will definitely help aspiring customers to have their own personal mobility solution. We believe the association with ICICI Bank for providing attractive and lucrative financing solutions will definitely benefit our customers.”
The scheme comes at a time when auto sales crashed due to Covid-19. Even before the lockdown was imposed to curb the spread of the virus, car sales had been slow for at least a year.
Ravi Narayanan, Head of Assets at ICICI Bank, said in a press release, “The Covid-19 pandemic has created a unique situation in the automobile industry—there are sections of customers who want to commute in private transport to maintain social distancing and hygiene, but their cash flow is under temporary stress now. Our specially curated, flexible EMI schemes are aimed at helping these customers to fulfill their desire of owning a car,”
As of March 31 2020, ICICI Bank had outstanding car loans worth Rs 32,217 crore, up 2.5% year-on-year. Car loans contributed 7.9% of the bank’s total retail loans. For ICICI Bank, retail loans make up 63.2% of the Rs 6.45 lakh crore loan book at the end of the last financial year. For the sector as a whole, vehicle loans grew 9.1% in the year till March 2020.
Maruti Suzuki has also partnered with Cholamandalam Investment & Finance Company, a non-banking financial firm, to offer Buy Now, Pay Later a unique EMI plan to its customers. It is applicable on select Arena and Nexa models including Baleno and Wagon R and is valid only on loans disbursed till June 30.
Also read: New 2020 Maruti Suzuki S-Cross Petrol Launch