Mahindra First Choice Wheels, a pre-owned car company of Mahindra and Mahindra (M&M) has allied with Syndicate bank to offer used car loans at an interest rate of nine percent.
Pre-owned Car industry in India is dominated by un-organised players; customers face problems of improper car documentation, car transfer delays, poor quality of cars & lots of other problems when they buy from unorganized players. First choice is a solution to this problem.
Shubhabrata Saha, CEO of Mahindra FirstChoice revealed that pre-owned car loans in the unorganised sector attracted an interest rate of 16-17 percent. He added, "Only 10 percent of the pre-owned market is in the organized sector and this small base allows us to work our way around with this sub-10 percent loan scheme. This is an entirely new ball game."
The projected demand of the pre-owned car loans is very high which makes Mahindra First Choice confident to come up with this development.
Currently, the ownership ratio of new cars to used cars is 1:1 in the country. In the United States, this ratio ranges from 1:2 to 1:2.5.