Bengaluru-based financial start-up OTO Capital has announced the launch of its monthly ownership plan for two-wheeler buyers. The firm is already offering its services for leasing cars. OTO's OMI (Ownership Monthly Installment) plan is aimed to make owning a vehicle easier with flexible financing options that will be available directly at showrooms. OTO Capital is offering both leasing and long-term ownership options for customers with the OMIs said to be 30 per cent cheaper than EMIs (Easy Monthly Installments) from a bank for the same period. The start-up states that the flexible financing option allows customers to own a vehicle at a minimal upfront cost, and will help boost demand in the auto sector that has seen a downturn with limited lending capacity from banks and NBFCs.
Speaking on the concept, Sumit Chhazed, co-founder, OTO Capital said, "We believe that My OMI Plan will be able to revive the demand in the auto industry with its affordable and flexible financing model. Time is ripe to bring in new finance options for customers as the current generation is seeking quicker access to vehicles, quicker upgrades and easy financing options. With OTO's 'My OMI Plan', customers can not only buy their dream bike within 30 minutes but also avail extra benefits like maintenance, insurance and a flexible payback option. The initial response in Bengaluru has been very good and we are looking to soon expand into 10 other cities."
Customers can avail a My OMI Plan for a period of one to three years on a two-wheeler and purchase a two-wheeler in as little as 30 minutes, according to the company. Customers are needed to make a minimal downpayment of ₹ 5000 (which is refundable) for a vehicle, and varies depending on the actual price of the vehicle; which is followed by monthly installments over the next 12 to 36 months. At the end of the ownership term, customers have the option to either return the vehicle to OTO Capital and reclaim the downpayment, or pay balance amount and fully own the vehicle. Currently, OTO has made finance options available for mass market offerings from entry-level commuters to premium motorcycles up to ₹ 2.5-3 lakh, but is yet to offer services for performance and luxury motorcycles.
OTO says that the OMIs are about 30 per cent cheaper than EMIs that a bank would charge against a loan, which makes the cost of ownership much lower than a standard purchase for that period. OTO also covers insurance and maintenance in its package. OTO Capital says it has partnered with over 100 dealers in Bengaluru including Aryan Suzuki, Sapphire Honda, Tansi Honda, Avanish Suzuki and many more for its financing options, and has already financed over 140 two-wheelers in the last 45 days as part of apilot programme. It has also tied up with 20 corporate companies in order to offer hasslefree and flexible financing options to its employees. Purchasing a vehicle via OTO also results in tax savings.
With its financing model, OTO Capital competes with other car and two-wheeler leasing platforms like Zoomcar's ZAP, Revv and Orix. It is only Revv though that allows you to purchase the vehicle after the leasing period is complete. Meanwhile, electric two-wheeler makers including Revolt Intellicorp and Ather Energy offer leasing options for their respective products.