Does Nissan’s lower-than-lowest EMI scheme really save you cash on Sunny and Micra?

Last month Nissan said it was offering the lowest EMI compared to any other carmaker to potential buyers. And this month, it has come up with a scheme that offers you “lower than the lowest” EMI, which claims to offer savings of up to 40% on equated monthly instalments compared to what other carmakers are offering. This scheme is valid up to April 30, 2013 on the Nissan Micra and the Nissan Sunny.

Under this scheme, a buyer can avail of a fixed EMI of Rs. 8,999 per month on a three-year loan on either the Nissan Sunny or Nissan Micra (for petrol and diesel models). A customer has an option to choose either a downpayment of 34% of the on-road price of the car or exchange their old car and get an additional exchange bonus of up to Rs. 50,000. EMIs are payable for 36 months, where 35 EMIs are at Rs. 8,999 and the 36th EMI is a bullet payment for the balance. However, a customer can extend the low EMI to the 36th month also if he chooses.

Nissan has tied up with HDFC bank, Kotak Mahindra Bank, ICICI Bank and Tata Capital to offer this customized EMI scheme. So just how does this scheme work out for you? Also read: Skoda Rapid deals compared

Nissan’s lowest EMI scheme analysed

On paper this scheme looks quite attractive, but let’s see how much you will save by either going in for a down-payment of 34% on a Nissan Sunny diesel XV (top-end Nissan Sunny diesel, one of the more popular Sunny models being sold) versus exchanging your old car worth Rs. 4 lakh (assumption), and getting an exchange bonus.

The Nissan Sunny XV diesel is available at an ex-showroom price of Rs. 9.13 lakh Delhi, and for an on-road price, including insurance and taxes of Rs. 10,40,012.

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Is it worth it?

Looking at the calculations, the biggest saving is on the exchange scheme, if you have an old car worth Rs. 4 lakh on exchange. Of course, the difference with the lowest EMI scheme by paying 34% down payment is a negligible Rs. 10,363.

However, if you look at what you would end up paying if you went for a regular five-year loan at 11.5% interest with 85% of the car’s value being funded, you make a whopping Rs. 2.41 lakh savings on the total cash outflow by opting for Nissan’s lowest EMI scheme. Going by that calculation, opting for this lowest EMI scheme works.

What’s the catch?

However, there is a catch. If you look at the last EMI payment it is a huge balloon payment that is worth more than what you paid as down payment for the car. And unless you have that kind of cash to pay up in the 36th month, you won’t benefit from this scheme.

Therefore, a regular loan scheme would be a better option, if you don’t have the cash for the balloon payment at the end of the lowest-EMI scheme.

Also read: Nissan Sunny CVT automatic priced at Rs. 8.92 lakh