Car ad-ons: Pay 25 pct, own a car

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Published: July 26, 2015 12:04:34 AM

The companies promise to share the equated monthly instalments of car owners in return for using 60-70% of the vehicle’s space to put vinyl stickers of their clients

 Simply put, the companies promise to share the equated monthly instalments (EMIs) of car owners in return for using 60-70% of the vehicle’s space to put vinyl stickers of their clients.Simply put, the companies promise to share the equated monthly instalments (EMIs) of car owners in return for using 60-70% of the vehicle’s space to put vinyl stickers of their clients.

BE IT the red-and-brown vinyl wraps around the coaches of Delhi Metro depicting the choice of plans that a customer of that advertiser—in this case, a private-sector bank—can avail of, or the blue posters of a brand-new real estate project that adorn the buses of BEST in Mumbai, ‘advertisements on wheels’ have been present in India for quite some time now. From specially-designed three-wheelers or trucks that carry ads of companies to radio cabs that come draped in the united colours of their sponsors, the advertising industry has covered almost every inch of space it could find on the ‘moving media’.

Now, taking that concept a step further, some advertising companies in India have introduced the ‘wrap advertising’ model for private cars with a promise to make the dream of owning a car a reality for every Indian. Simply put, the companies promise to share the equated monthly instalments (EMIs) of car owners in return for using 60-70% of the vehicle’s space to put vinyl stickers of their clients.

New Delhi-based Rohit Gulati and Mumbai-based Siddharth Mahajan bought their cars, a Maruti Eeco and a Swift Dzire, respectively, using this new ad model. Rohan Gupta, a 32-year-old Pune businessman, too, got his maiden car, a Hyundai Eon, in a similar manner. The three paid only 25% of the actual price of the car.

They were free to buy a car of their choice and the vehicles were registered in their names. The advertising companies also provided for additional maintenance and fuel costs in terms of referral bonuses. The only catch? Their vehicles had to sport the wrap ads of the advertising companies’ clients.

“This concept will enable brands to reach, in the most interactive manner, a wider target audience and create a new communications medium, which is still at a very nascent stage, but is poised for growth,” says Varun Kumar, director and founder of Advelocity, an integrated advertising company based in New Delhi.

As per the scheme, a person can purchase a car with the help of these advertising companies by paying a down payment of 25%—or 20% in case of Advelocity—with a five-year loan period option. The advertising company will then cover the EMIs of the car loan. In return, around 60-70% of the vehicle’s exterior will be covered with ads.

There are a few conditions, though. The companies have a ceiling limit to the maximum amount they will pay—
Rs 4 lakh in the case of Advelocity. Then there is also the condition of running the vehicle for a set distance per month and keeping it clean. Plus, there are other charges like cost of insurance, authority registration, logistics, membership fees and others, which differ from company to company.

To simplify things, several companies have a fixed list of cars from which an interested party can take a pick. “The basic idea is to build a fleet of a few hundred cars and then to reach out to companies to advertise with us,” says Kumar of Advelocity. “This method proves to be cheaper and has a far better reach than hoardings and billboards,” he adds.

As per Brand on Wheels, another such company based in New Delhi, it’s a win-win situation for both car buyers and advertisers. While the EMIs of the car owners are taken care of, advertisers get a new platform for their campaigns. Nearly four million people have shown interest in the offer, says the company.

Brand on Wheels was founded by 30-year-old Sachin Rastogi, who came up with the idea during a visit to Australia in 2013. “I saw advertisements on private cars there and innovated on the model on returning. I linked it to EMIs, taking out the pain of buying a car and also offered a new medium to advertisers—to carry their campaigns on roads,” he says.

Rastogi has been working on the idea since September 2013. He has so far built a pool of over 200 new car buyers across Delhi, Mumbai, Pune and Bengaluru.

“I need to have a sizeable pool—at least 200 cars in each city—before I approach advertisers. If, say, an advertiser wants 100 cars in one city, I should be able to deliver that,” he adds. The huge interest shown by potential customers bodes well for the venture, as per Rastogi.

Though the offer seems too good to be true, it does come with a few regulations. Cars sporting ads have to run at least 1,500 km a month. Besides, car owners have to install a GPS, which costs about Rs 10,000, and pay a certain amount as membership fee, ranging from Rs 10,000 to Rs 30,000, depending upon the company. Owners also have to pay for the removable vinyl stickers (roughly Rs 55 per sq ft). Needless to say, they have no say on the ads.

Kumar of Advelocity says his company insists on new cars because buyers are likely to be more careful about their maintenance. Such cars are less likely to be away for repairs too. The GPS helps track cars and ensure they run for the minimum number of kilometres a month. Buyers take note: if the car fails to hit the 1,500-km limit in a month, you will have to shell out the EMI yourself.

The companies come into the picture only after a car is purchased. The advertising company enters into a contract with the buyer, not the lender. “A buyer should pay at least 25% of the cost of a car. Even if a buyer has bought a car without taking a loan, he can make money by offering the car for advertising,” says Rastogi of Brand on Wheels.

To start with, the offer is on cars that cost up to Rs 10 lakh—again, this varies from company to company. So, if you are buying anything from a Tata Nano to an all-frills Honda City, you could offer the car’s body for ads. For the advertiser, the cost will be the EMI plus the margin that the companies will make. This works out much cheaper than similar outdoor options like hoardings and poster-size outdoor ads, as per Rastogi. “Plus, you get the mobility, which a static hoarding won’t offer,” he adds.

In short, if you don’t mind owning a car that has a few ads on it, it’s a pretty good way to pay for your EMI—
and gas too.

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