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  • Writer's pictureClement Francis

How to buy a luxury car?


Luxury cars in India are expensive. Most models sold by carmakers like Mercedes-Benz, Audi or BMW attract 28% GST as well as 22% compensation cess (because most have engine capacity exceeding 1,500 cc and length exceeding 4,000 mm). Prices of a new Mercedes-Benz, for instance, start at Rs 44 lakh, ex-showroom (for the A-Class, a small sedan). Audi cars start at Rs 43.85 lakh (the A4), and BMW cars at Rs 43.5 lakh (the 2 Series Gran Coupé). Cars by Lexus, Jaguar Land Rover, Volvo and Porsche are equally or more expensive.


For such high prices, not all banks have dedicated financial instruments, and that’s why carmakers themselves are actively involved in financing. Brendon Sissing, MD & CEO, Mercedes-Benz Financial Services (MBFS), told FE that while banks do offer financing and insurance schemes for luxury cars, they may not necessarily be tailored to the specific needs of a luxury car customer.


MBFS is a wholly-owned subsidiary of Mercedes-Benz AG, and finances cars from the company’s own financial resources. “We do not tie-up with any specific bank or financial institution for financing our cars,” Sissing added. “This allows us higher flexibility to operate and provide customisable financing and insurance options to customers.”


In addition to new cars, MBFS also finances pre-owned luxury cars. Sissing said purchasing a certified pre-owned Mercedes-Benz car with MBFS ensures peace of mind. The carmaker recently launched the Star Agility+ scheme under which a buyer can keep the car for a predefined period, exchange it for new car, refinance it, or hand it back to the dealer.



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