Driving and owning your own car is a matter of pride for many. In recent times, alternative car ownership models have been introduced to make car ownership more convenient. Services such as car subscriptions and leasing programmes provide a car for you to drive at a premium to be borne by you every month. While convenient, these services take away the pride and experience of owning your own car.
Another alternative ownership model that has emerged are Buyback Schemes, which allow you to get an assured buyback value after a set number of years. These schemes were offered by luxury car manufacturers in India but it hasn’t trickled down to mass market manufacturers yet. While these schemes offered some value to luxury car customers, the greatest value for a buyback scheme is in the used car market. The used car market has a shorter upgrade cycle than new cars and the provision of an assured buyback is a definite financial incentive as compared to car subscription models.
However, a quick survey of the used car market shows that an official buyback scheme does not exist even with the potential value to provide more value to customers. Buyers looking for short term car ownership are faced with the prospect of a greatly undervalued resale value when it’s time to sell their car. This undervaluation is a major reason for some people to choose car subscription over owning their own car.
Introducing Spinny Buyback
In order to better cater to consumer demand while also providing a clear alternative to the high prices of subscription-based ownership, Spinny is introducing a comprehensive Buyback Programme for all cars on the platform. Buyers can opt to redeem their buyback value after a period of 6, 12, or 18 months, with respective buyback values on offer. Through this service, buyers can get an assured buyback value for their car at the time of purchase, while making significant cost savings.
With the introduction of a major initiative with the potential to change car ownership patterns in India, it is essential that we explain why a buyback programme is being introduced. Additionally, introducing a buyback programme needs to provide tangible benefits for the consumer. We will be delving into the potential financial benefits a consumer can expect to see when buying a Spinny Assured car with Buyback.
Demand in the Market
For 5 years, Spinny has been gathering data and feedback from every transaction that has been made using our platform. As we continued making the used car transaction experience convenient with every new service offering, interest in owning a car among people was also growing in parallel. In the last 5 years, this interest has been fuelled by an increase in disposable incomes as well as people’s aspirations becoming more accessible in those 5 years.
With buying and selling used cars becoming less problematic, people were more open to sell and upgrade their cars more frequently than before. Previously, people preferred owning a car for at least 10 years. Today, that ownership period has dropped to under 5 years. Over the last 5 years, Spinny had been facilitating a number of car upgrades for customers. About 60-65% of these customers were people who had bought their cars from Spinny and were selling their car to Spinny to upgrade to a newer or larger pre-owned car.
A survey of these customers showed a growing interest for a Buyback Programme where an assured buyback value would keep their investment safe from the volatility of the used car market. With customers being open to opting for a Buyback Programme, it was natural for Spinny to expand on the convenience already being offered and incorporate a service that would truly deliver value to our customers.
A New Need
The global coronavirus pandemic has completely reshaped consumer demand in India. Before the pandemic, car ownership had been declining with the easy availability of cabs through ride-hailing apps and car subscription services. After the lockdown, people have become more cautious about hygiene and cleanliness. Even with assurances, people are still wary about using cabs and car subscriptions to commute. While these can be avoided, commuting for essentials, and in some cases for work, is unavoidable.
According to a survey by consulting firm Deloitte, 79% of the respondents showed an interest in owning their own personal vehicles. The reduced incomes caused by the pandemic in India has also reduced disposable incomes for the near future. People are turning to used cars in the post-lockdown period in order to reduce their overall purchase cost and cost of ownership. Consumers are looking to maximise their investments. For consumers in the market for a used car, Spinny’s Buyback Programme is a bonus add-on that returns value in the short-term.
Savings for You
Understanding how buying a used car in Spinny’s Buyback Programme provides an overall savings for you, comparisons with competing subscription models is required. To make an apples to apples comparison of the total cost to the owner between subscribing to a car and buying a car with buyback, we will need to compare the monthly cost of ownership of the two models.
For the comparison, a popular premium hatchback available on both models has been used. The associated monthly costs for both models is provided in the table below.
(Car price: Rs. 5,34,000)
Monthly Cost of Ownership
Cost of Ownership
Based on the data above, it is evident that buying a car with Spinny Buyback provides significant savings if you plan to own the car for more than a year. The cost of ownership for buying a used car with Spinny Buyback is comparable to subscribing to a car. If your plans are to drive a car for a month, subscribing is a viable option. For any period longer than a month, buying a used car with Spinny Buyback provides the most value and savings.
Owning the car for 12 months allows you to save 30% as compared to subscribing to a car while owning the car for 18 months, lets you save 50% as compared to subscribing. These savings provide financial flexibility, especially in the current economic climate. Flexibility and value are the fundamental pillars of the Spinny Buyback Programme that gives the buyer the power to decide how they want to own and drive their car.
With this brief analysis, buying a used car with Spinny Buyback becomes a viable option for those looking to subscribe to a car for a period of 6 months to 18 months. In terms of the total financial costs to be borne you, a used car with Spinny Buyback works out to be cheaper in the short-term
Commit Less, Drive More
While financial calculations speak to the mind, does the Spinny Buyback speak to the heart? The answer is, yes it does. Buying a used car with Spinny Buyback gives you the freedom to completely own your own car without significant restrictions and conditions slowing down your drive.
While subscribing to a car gives you the ability to drive your own car, it doesn’t let you make the car completely your own. Driving a car on subscription is essentially comparable to driving your friend’s car. You can drive the car but you must drive it carefully and within your friend’s rules. While you will still drive your own car carefully, the rules you drive them by will be your own. Subscribing to a car for a period of a year or two is essentially paying for a restricted drive.
When it comes to owning a car for a short period up to 2 years, buying a used car with Spinny Buyback provides the benefits and freedom of full ownership without major restrictions on how you choose to experience your car. There are, of course, some restrictions with respect to the condition of the car and external modifications but these are not hindrances to how you drive.
There are added assurances in buying a pre-owned car with Spinny with the provisions of 1 year warranty and our detailed inspection report. If you were to drive your car your way without any accidents, we are confident in providing the exact buyback value for your car when you decide to sell it back to Spinny. When considered in its entirety, Spinny allows you to commit to a smaller ownership period while driving more to your rules and preferences.
A Complete Customer Experience
Over the last 5 years, Spinny has been making used car transactions more transparent and convenient for our customers. While chasing this goal, we have been pioneering innovative services that provide a complete customer experience. We were the first used car platform to introduce a 200 point inspection report to improve transparency and confidence in the car customers were buying.
More recently, to further improve convenience for our customers, we are offering home test drives and home deliveries. These offerings, along with our online-focused platform, provided a safe and convenient way for customers to buy their preferred used cars in the post-lockdown period. This is further affirmed with the overwhelmingly positive reviews, like the one below, we have received over the years.
With the introduction of the Spinny Buyback programme, we are further strengthening our commitment to delivering a complete experience to our customer. Our confidence in the condition of the car allows us to offer a competitive price when we sell and when we buyback. Our current initiatives and the ones to come in the future will continue to deliver a transparent, convenient, and overall delightful experience to you.