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Car Rental / Car Hire in Bangalore |
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In the west, when you lease a car, you need to pay the depreciation cost to the leasing company. Let us explain this- you
lease a car with a market value of Rs.2,50,000/- and if that car has got a re-sale value of Rs. 1,50,000 after two years. And
you lease this car for 2 years period. Then you actually pay for the depreciation, which is 2,50,000 - 1,50,000 = 1,00,000.
Of course you pay the interest and a premium to the car leasing company extra.
But in India, Car Rental Companies and Car leasing companies operate on an entirely different concept. In Cities like Bangalore Car owners enter an agreement with a Business organization and provide pick up and drop service for the executive of the organization. Normally, as per the Car lease contract, 8 (or 10) hours of dedicated rental car Service will be provided to the company. We all understand that the year 2009 is significant for the Automobile Car market in India for two reasons. One is the Global slowdown. The slowdown has its impact on automobile car business on many ways. The Car sales droped down. Automobile companies face finance crisis. Also private corporates, especially, the Software and BPO companies' decision to cut down costs. This means many Car leasing contracts are terminated and thousands of cars which earlier entered into leasing contract with Corporates in Bangalore are now left in the lurch. Second important development in automobile car market in India is the arrival of cheap cars in Indian market. A large number of automobile manufacturers are now exploring to come with their own brand of small cars in Indian market. The arrival of small cars in India will have a big negative impact on the second-hand car market. Once the small cars come to the market, then there will be a big drop in the prices of second-hand cars in Bangalore market. Anticipating this, many Bangaloreans, are analyzing the benefits of Car lease and Car Rental in Bangalore. If you want to buy a car for a certain price, remember that you always pay interest of the Car loan, and end up spending significantly higher price than what you initially expect. And we all know that, if we use this car for 2 years period, and then sell it in the second-hand car market (used car market), then we get a certain price - relatively very low price compared to the original market value. Also one has to pay salary for the driver, petrol and maintenance charges. If you calculate the petrol and other expense and driver’s salary, then you understand that the over all expense for owning a car and efficiently using it, is not very cheaper compared to renting a car. We have not considered Insurance and other expenses. Please also consider that, in Bangalore, if you have to own a car, then you would end up paying lakhs of rupees for a Car Parking space in your apartment. And what if you meet with an accident? Till yesterday, car owners were comfortable with the fact that Second hand cars or used cars were offered a good price in Bangalore. As Bangalore is not a coastal city, Bangalore Cars always got higher price. But now things are going to change for worse. There are at least half a dozen Car Manufacturing companies which are aiming to enter the small car market. To add to this crisis, a large number of young professionals lost jobs in India and there is a difficulty in arranging bank loan for Second hand car purchasing. As a result of all these, the price of used cars in India is going to plummet in the future. This means, now there is only a very small difference between the over-all cost if you buy your own car or if you lease a car for your usage. When Car owners agree to lease their cars to a private company, Car Drivers and other car owners ensure that they get a minimum monthly income for this period, and this helps them to repay the finance cost of the car. A large number of cars which are sold in India are bought with financing help from banks or private financing agencies. On many occasions, the individual owners of the Taxi cars fail to generate enough revenue every month and there are cases of private financiers forcefully taking away the cars when the customers fail to ensure monthly repayment. It is to be noted that thousands of people who migrate to cities looking for new income sources, and who buy cars do not have credit worthiness, and are at the mercy of private financing agencies. And when thousands of such cars are offering Car rental service and Car leasing service in Bangalore, it is the competition between these Car Leasing Service Providers which determines the market price of their service. It is unlikely that Car Rental and Leasing companies cut down the Tariff, as they dont enjoy huge profit now. (And oil prices may again go up.) But the market law is such that, the higher competition in the market would always ensure a re-structuring of price-packages. In case of Bangalore Car Rental business, this means that attractive packages will be available in the future as more players are now coming to the market. It is possible that without cutting down the "per-kilometer charges", car Rental companies may offer better quality services and they may offer attractive hourly based packages to buoy up and attract more business. Hence, in the future, more and more companies would opt for leasing cars instead of owning their own cars. A large number of business houses had difficult times to deal with various issues when they owned company cars. In the coming days small offices also would opt for Leasing cars instead of buying own cars. Many families would also understand the convenience of renting a car, as that would help them to get best value for money. For working couples, renting a car is always better than having their own cars, especially, if both of them work at two different corners of the city. For small companies, there are two obvious advantages of leasing cars. First, ensuring cash on hand. Investing on depreciating assets is never good business decision. But this is more right in the present scenario. When you avoid a huge one time investment, that cash can be used to channelize into other priority areas. The other advantage is clear. When the business decisions go wrong, you dont burn your fingers completely. If you have already made huge investment keeping in mind a three or five year business plan, and if all of a sudden market is hit with slowdown, there is nothing you can do to save your investment. See how BPOs in Bangalore are cutting down a lot of expenses by re-negotiating or cancelling some of the monthly lease contracts with Car Rental companies. What is true about companies is also true about families. Imagine, you unexpectedly getting a promotion cum transfer to a different metro or you plan to go abroad. Are you going to transport your Car to US or Europe? However, if you have nothing else to do with your cash, and no plan to invest it where you can get faster return, then you may buy a car instead of rent it. Also, many families gift cars and they dont care about the money they spend. (To See Daily Bangalore Car Rental Tariff Please click here --> Bangalore Car Rental Tariff ) (To See Monthly Bangalore Car Lease Tariff Please click here --> Monthly Car Lease, Bangalore ) |
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