After more than a year’s wait, the Nano is finally on display in Tata Motors’ showrooms. With the basic model being offered at the originally promised Rs 1 lakh, it’s the price tag that makes this car so attractive. If you are among prospective Nano buyers, here’s what you need to know about buying the car. Get-set-go
Applications for the Nano are being sold in Tata Motors dealerships, the Tata group retail outlets such as Croma and Westside and at branches of State Bank of India (SBI). You’ll have to shell out Rs 300 (as much as your college application form?), to apply for Nano. You can save Rs 100, if you choose to book the car online.
Money paid for the application form is non-refundable, though you may get ‘Nano’ merchandise in return. You are required to submit filled-in forms with SBI, the exclusive booking agent for the car, only during April 9-25. The booking process
Along with the application form, you need to pay the booking money, which ranges, for the three Nano variants, from Rs 95,000 to Rs 1,40,000. If you can afford to pay the entire booking money at one go, you need to draw a demand draft favouring “Tata Motors Limited.-A/c Tata Nano”. But on the other hand, if you don’t want to lock in this sum upfront, you can always seek help from banks.
Tata Motors has tied up with 15 banks, including State Bank of India, Punjab National Bank, Union Bank of India and United Bank of India, as preferred financiers for the Nano. On your availing of a loan from these banks, let’s say SBI, the booking amount that you have to shell out gets reduced to Rs 2,999; the rest will be be footed by the bank. Allotment Process
Allotment will commence after 60 days from the closure of booking. Initially the car will be allotted to only one lakh applicants (at the promised price) selected on a random computerised basis. The others have an option to either continue with the booking or cancel it. Those who choose to retain their booking deposit will be eligible for interest on their deposit.
However, note that this interest will be paid only from the date when Tata Motors announces the second set of allotments. The interest rate will be at 8.5 per cent (compounded annually) for a retention period between one and two years and at 8.75 per cent for a retention period of more than two years.
What if you decided to avail of financial assistance but your application has been not accepted in the first round of allotment?
This matter remains to be sorted out between banks and Tata Motors. If you still want to buy the Nano, banks say that you will be given an option to pay the bank the remaining booking amount and join the waiting list with the deposit amount. You can also simply choose to opt out.Delivery
Though it’s a well known fact that Tata Motors currently has the capacity to produce just 50,000 cars this year, the company promises that it will commence the delivery process from July 2009. It has also promised that the first one lakh cars will be delivered by March 2010.
So if you’ve decided to wait for the second phase of delivery, then committing funds to this car is something like putting your money into a fixed deposit scheme.
While a deposit with a public sector bank may fetch you interest rates ranging between 8 and 9.5 per cent for two years, the Nano “deposit” offers you between 8.5 and 8.75 per cent for the same period. Financing a Nano
There are 15 preferred financiers to exclusively fund loans for the Tata Nano, out of which only a few banks have as yet finalised their product offers. Take SBI’s scheme, for instance. You’ve got to pay Rs 2,999 to book the car through the bank. If you bag the ‘allotment’ in the first round, then SBI will chip in to cover 100 per cent of the booking amount (customers aren’t required to pay any margin money). Given SBI’s loan rates of 11.5 to 11.75 per cent; the EMI (equated monthly instalments) works out approximately to Rs 1,850 for a month for a six-year loan.
If you are to avail of a loan from Bank of India, you will spend about Rs 1,800 a month for the Nano, as EMI. But in this case, you’ll need to pay 5 per cent margin money to avail of the facility which roughly works out to Rs 4,750. United Bank of India is offering loan at 10 per cent interest.
To avail of this scheme, the bank charges just the processing fees (Rs 1,000) at the time of booking and will advance 100 per cent of the booking amount.
If you’re lucky to be allotted Nano in the first phase, your EMI payment will be Rs 1,760. But even if you’re not, you will still have to pay the bank the interest costs for the booking period. Maintenance cost
But remember, the EMI is just one of the “costs” of owning a Nano. If you’re upgrading from a two-wheeler, don’t forget to factor in higher running expenses on items such as fuel cost and replacements. Well, the company claims that Nano (under test drive conditions) offers a mileage of 21.6 km to a litre. Adjusting for Indian roads, motor reviewers optimistically expect the car to manage 15-17 km to a litre of petrol. This would be more than what other small cars such as Alto or Santro offer (11-14 km kilometres a litre). Nano has no diesel or CNG variants.
Being a rear engine model, Nano offers no boot space. So if you’re looking to make those long distance trips, you may need to fit in a luggage carrier and that would amount to an extra cost. Nano has just one wiper as against two or three in other cars. Nano also offers tubeless tyres that give lower rolling resistance.Go for it?
When compared to other small cars, Nano does seem a good bet strictly in terms of cost. Be it on EMIs or maintenance costs, even the high-end version of Nano is cheaper by 30-40 per cent when weighed against Santro and Alto. But if the car aims to capture the market space of two wheelers, it may still be a more expensive option.
You can pick a stylish bike that promises satisfactory on-road performance in terms of mileage and annual maintenance for Rs 35,000 to Rs 55,000; but then, Nano may carry some premium for a safe and
comfortable car ride.
http://www.thehindubusinessline.com/iw/2009/04/05/stories/2009040550731400.htm
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