Cars24, a growing tech-enabled used car company, has announced that it has procured an NBFC licence from the RBI and will be venturing into the consumer lending business. With an aim to provide seamless and instant access to credit, the company has also announced the formation of a separate entity - Cars24 Financial Services under the Cars24 group. The company will be launching its services in Delhi, Mumbai and Bengaluru in August and will scale up to the other cities gradually.
Cars24, a used car buying and selling platform, will facilitate vehicle loans to customers as well as finance channel partners to help them expand their businesses. While the customers will be eligible for a credit based on the car value they are buying, channel partners will be eligible to credit as high as Rs 1 crore depending upon their requirement. For consumers, the average ticket size of a loan would be Rs 2.50-3 lakh.
Commenting on the launch of consumer lending business, Vikram Chopra, Cars24 co-founder and CEO, said, "With less than 15% penetration of financing in the used cars segment, we feel that there is a massive market opportunity that can be tapped under the financing sector. We are delighted with this progress and intend to set a benchmark for delightful customer experience on our platform with our new offering. As a brand, we not only promise an ecosystem for buyers and sellers where they can evaluate their vehicles but can also avail loans for a quicker transaction. We have huge latent demand already in the system due to our scale and branding, and with our first movers' advantage in the financing business, we are hopeful to make the lives of our end users hassle-free."
The company is planning to hire over 200 people for its newly launched arm and is targeting loan disbursement worth $25 million within the maiden year of its launch. The company will offer financing at competitive interest rates based on the creditworthiness of the consumers. It will also allow consumers to sell their cars to Cars24 at any time in the future to pay back the loan – a first of its kind feature in the Indian used car financing market.
"With our lower turn-around-time for credit as compared to other banks, we believe that our consumer lending business will benefit both our customers as well as channel partners. The idea is to help those buyers who have been unable to fulfil their dream of owning a car due to a lack of funds and support from traditional institutions and banks. Our transaction led approach has been our strongest growth pillar and will further strengthen our ability to address the challenges of consumer business. Anyone who is looking for a loan can easily avail it by simply checking the eligibility criteria and completing the documentation work on our website. Once the application is approved by us, one can get the money in hours instead of weeks," said Ruchit Agarwal, Cars24 co-founder and CFO.
Cars24, which currently operates in 35+ cities with more than 150 branches, recently announced its foray into the franchise model and inaugurated its first outlet in Surat. The company intends to scale up its presence in 300+ tier 2,3 and 4 markets by 2021.
About Cars24
Cars24 is a growing tech-enabled used car company that offers an efficient and reliable platform for customers to buy and sell used cars. It enables car owners to sell their cars within an hour of a single visit to one of their many Cars24 branches. Apart from instant payment, the company also takes complete responsibility for all the paperwork including RC transfer and enables end to end transaction. The company, in turn, sells these cars online through its proprietary auction platform to businesses across India, dealing in pre-owned cars.
Within a few years of its inception, the company has witnessed an exponential growth and currently employs over 3000 people across India and has grown rapidly, making it a leading player in the Indian used car sector. With over 10,000 trusted channel partners from more than 230 cities across India, Cars24 has over 150 branches in 35+ cities. The company is backed some of the marquee investors like Sequoia India, Exor Seeds (a venture fund affiliated with one of the world's leading holding companies controlled by the Agnelli Family), Apoletto (the investment vehicle of DST Global''s billionaire founder Yuri Milner), Kingsway Capital (London based multi-billion US$ fund) and KCK (Silicon Valley and New York-based investment firm).
