The modern world’s first global pandemic has put a huge spanner in all its gears. As we still await a proper solution to this problem, the world has slowly started returning to work with precautions. However, before we can be back up to usual speed, it will be quite some time.
In such a situation, spending habits have changed and the majority of the world is wary of spending unless it’s something really needed. The pandemic has also brought personal mobility to the fore, as shared mobility is no longer the way to go due to the physical distance one must maintain. For the cost-benefit and the practicality they offer, two-wheelers have emerged as the weapon of choice. Given the current financial situation though, buying a brand new two-wheeler might not make sense to some and as a result of that, the used two-wheeler market has witnessed a spike in demand. Another option is to rent and to help you which option’s better, Mr Sasidhar Nandigam, Chief Strategy Officer at CredR, decided to share his insights. Here’s what he thinks:
Amidst the coronavirus pandemic, consumers’ buying behaviour is undergoing a lot of changes. In this time of uncertainty, users are looking out for options in second-hand goods, be it two-wheelers or furniture or air-conditioners or cars. With job uncertainty and layoffs looming on the horizon, people are wary and confused about what to do – whether to opt for renting or buying a second-hand two-wheeler. Due to the corona scare that surrounds the use of public transportation, whether it is college-goers or working professionals, everyone is in favour of using private mobility rather than shared mobility.
While the pandemic rages on, renting a two-wheeler during this time for a daily or short duration basis poses a scary proposition for consumers as sharing a rental two-wheeler with other strangers can be deemed unsafe due to the high risk of contracting the virus. Simply put, the loss of income due to the risk of virus spread, on account of using a rental two-wheeler, is far higher and more dangerous in this new world. Let us delve more into this:
The freedom of choice when you buy
A rental fleet will limit the user by their restricted options of models and variants; whereas, a purchase will set one free. For example, Sridhar living in Bangalore wanted to rent a Bajaj Avenger, a cruiser style motorcycle which is perfect for long rides. However, Sridhar was unable to get his favourite bike from a renting platform. So he had to compromise on his choice. This is a common occurrence where choices take a backseat for consumers. However, while buying, users can pick from a wide variety of make models that checks their criteria.
Safe and instant mobility with an owned two-wheeler
In situations of urgency, having your own two-wheeler far outweighs the advantages of renting. Whether it’s a late-night emergency or to make it on time for an interview, your own two-wheeler will always be around. Especially in the current lockdown situation, having your own two-wheeler lets you move around to procure essentials and avail medical help if an emergency arises.
The lower long-term cost of ownership when you buy
Let’s understand how two-wheeler rental economics work for a consumer (for the uninitiated). Well, there is a safety deposit, to begin with, then the daily/ hourly rentals which get capped by the number of hours or the number of kilometres. Exceeding the cap can lead to higher rental expenses. While maintenance is covered by the rental company, expenses arising out of on-road accidents or issues have to be borne by the consumer. And fuel costs too. When you buy, users need to pay a one time cost of owning the two-wheeler, along with recurring fuel and servicing expenses. Any accidents or issues are handled by an insurance cover. And over a period of time, the cost of owning gets relatively cheaper. Moreover, buying a two-wheeler on EMI (loan) makes it easy on consumers pocket and cheaper than paying huge rental expenses every time they use it. We always suggest that users should buy a two-wheeler with the same amount of money rather than renting a two-wheeler on a daily basis.
Creating an asset
Indians come from a strong belief system of saving and creating meaningful assets as milestones of progress in their lives. While renting will always remain an expense, investing in a two-wheeler, even if it’s on EMI, will eventually create an asset for a buyer. A rental can only be sustained for as long as a user can afford it. However, an owned two-wheeler can be easily sold for cash when faced with a financial setback.
Scope to customize
As opposed to renting, buying gives one the scope to enhance, customize, and modify a two-wheeler as per one’s wish. This may substantially increase the resale value of the vehicle if they wish to sell it in the future.
Currently, the Chief Strategy Officer for CredR, India’s Largest used two-wheeler brand, Sasidhar is a professional with over 10 years of experience working for Venture Capital/ Private Equity Funds and Start-ups in strategy, fundraising and growth roles. His core expertise lies in consumer internet companies and has been part of Growth the story that scaled companies such as BigBasket, FreshMenu and CredR. He is a regular speaker at various events on entrepreneurship. He lives in Bangalore and is a proud father of two children.