Inaugurating the financial services business in India, the global chairman of Daimler AG Mr. Klaus Entenmann said, “Individual lease is a big draw in developed markets. In the US, 40% of individual sales is through the leasing route while only 15% through finance. We expect the trend to pick up in India as well and this country seems to be adequately placed for such an option”.
Explaining the process of individual lease, Sidhartha Nair, MD of of Daimler Financial Services India (DFS), told, “One does not need to pay the full price of the car. Normally, as per the leasing model, we give the car on lease for a period of three years, working out a residual value upfront. This value, which on an average is 50% of the cost of a new car, is something the customer does not need to pay. All that he pays us is the remainder value of the car, which is nearly half of its cost. We lease the car to him.”
There will be two options in front of customers who are willing to buy new Mercedes model. Either he can get financing for buying the car and register it in his name, or else he can go for a lease model. And in that case the customer will need to pay only half of the cost as the rest of the cost will be taken as the residual value after three years when the company takes the car back.
