OTO Capital Reports 386 per cent increase in vehicle leasing post lockdown in Hyderabad 

Hyderabad: OTO Capital, an alternate finance startup for purchasing two wheelers, has reported a 386% increase in consumers opting for vehicle leasing to finance their two wheeler purchases. Additionally, over 45 new automotive dealers in the city have signed up with OTO Capital to provide vehicle leasing as an alternative model of financing to their customers, including Fortune Honda, Autofin Honda, Varun Bajaj. With the success of its completely online model and increasing demand from dealers, OTO is going live in more than  45 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 3000 customers in Hyderabad in 2021.

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 400 two wheelers have been leased since OTO was launched in Hyderabad 4 months ago and the city has contributed to 35% of overall online sales for OTO. The buyers in Hyderabad fall under the age group of 30 with 86% being male customers. Post the pandemic, OTO has seen an increase in the number of self-employed professionals opting for vehicle leasing constituting over 46% of the overall portfolio. 

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. There has been a surge in demand for scooters and early entrant bikes priced below INR 1 Lakh. The most commonly leased brands are Honda Activa, Suzuki Burgman and Bajaj Pulsar. 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 INR 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 a 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 with OTO is that one can save upto 30% through OTO Monthly Installments (OMI) compared to a traditional bank loan EMI. 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. 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. 

Sumit Chhazed, Co-founder, OTO Capital said, “We are pleased to announce our new partnerships in Hyderabad and continued growth in the city. There has been a lot of interest from buyers in Hyderabad and leasing vehicles is becoming more popular with customers who want flexibility, affordability and not compromise on their choice of model and brand. We are bullish about Hyderabad and will soon be open to other cities in the region and sign more dealers in Hyderabad and surrounding towns.”

Akshay Jain, MD, Autofin Honda said, “We are very happy to partner with OTO Capital, which is helping us lease two-wheelers to our customers. Buyers are asking for affordability, convenience and compliance with COVID-19 guidelines. Many of them are looking at midrange models that they can change in a couple of years’ time. OTO has been able to provide all of these benefits to our customers and we have seen increased footfalls in the last few months. We are now actively educating our customers about the leasing option and many are interested in trying it out.”