Here's the key: Drive now, pay later

MANILA, Philippines - There was a time when people lined up (yes, lined up) to snap up condominium units like there was no tomorrow.

Those were days of a bygone era. There is hardly anything novel about residential buildings anymore, and there is actually a perceived glut of towering abodes with their shared amenities and association dues.

That’s pretty much a universal theme now. Today’s consumer is spoiled for choice. The age of commercialism and the triumph of free enterprise have meant leaps and bounds in terms of quality. Natural selection pervades the marketplace, and that’s always good news.

However, product development is not the sole domain of innovators. Marketing and sales have also become a fertile ground for, well, fertile minds. If your product brings your customers to your doorstep, marketing and sales close the deal.

Since a car is a big-ticket item that has the potential of breaking your budget, sales people have, through the years, explored ways to lessen the purchase impact on their target buyers’ liquidity. People, after all, lose appetite and interest when they lose money.

Low down payments, interest-free schemes, freebies, and other perks have been thrown in through the years to sweeten the deal.

Now, an enticing scheme is sweeping the marketplace. The industry players hope it will sweep you off your feet, too. Enter the “Drive Now, Pay Later” pitch.

Hyundai Global City’s similarly named promo is the dealership’s “way of allowing clients to enjoy their cars while allowing flexibility of payment and immediate gratification,” says Michelle Peralta, AVP for marketing of parent company Autohub. The Global City dealership (plus the newly opened Hyundai Greenhills) program, unveiled last June, extends a very easy 20 percent down payment scheme for the buyer, with the balance to be paid from 12 to 60 months. Feedback has been encouraging as gleaned from a good number of client inquiries, according to Peralta.

Toyota Motor Philippines (TMP), for its part, subsumes the payment scheme into its Toyota’s Biggest Savings Promo. Simply called Pay Later, also under the umbrella program are the Pay Low, Pay Light, and Pay Cash programs.

The packages, according to TMP public relations officer April Francisco, began to be offered also June, and they have been extended till this month to celebrate TMP’s 22nd year. “We’re doing this project in cooperation with our financing arm, the Toyota Financial Services,” Francisco continues.

“Pay Later has received such a warm reception,” she shares, “and dealers have been getting a lot of inquiries about it, so we are very pleased with the attention the promo is generating. We remain positive that it will boom soon.”

Even premium brands like BMW are getting into the game. The Euro carmaker debuted its BMW Zero Payment Plan (BMW ZPP) just this month. “The client either trades any car equivalent to 50 percent of the BMW of his choice or places a down payment of 50 percent. He needs to issue a post-dated check equal to the 50 percent balance as collateral for the bank. After paying all the incidentals like LTO registration, insurance and chattel mortgage, he can drive home the car,” explains Jay Cruz, Asian Carmakers Corporation sales director. “For 18 months, the buyer does not have to pay any interest or monthly payment. After 18 months, he can have it re-financed or use the PDC to fully pay off the car.”

Jay shares that the best option for the prospective BMW buyer is to “use his first BMW as trade in for another brand new BMW of his choice so long as its value is 50 percent or more of the new car and not have to worry about monthly payments for another 18 months. This won’t be a problem because BMW cars have high resale value even after 18 months of use. As long as he is in the BMW ZPP, he has no monthly payments to worry about.”

Feedback, Cruz continues, has been very good. “Showroom traffic and phone-ins have increased. This is our initial barometer for the buying public’s interest in the program.” It’s too early to spot a trend, he says, but “sales of premium vehicles through financing are on an upswing.”

In Hyundai’s case, Peralta says that their program makes available “a few of the least expensive models” of the brand. One can thus correctly assume that dealership is targeting a demographic that can’t buy a new car under normal circumstances.

For her part, Sabrina Mendoza of Toyota Financial Services, shares: “We have noticed that those expressing interest for the plan are largely involved in businesses of their own.”

Jay Cruz says the BMW ZPP “is another innovative scheme from BMW that makes it easy to own a BMW,” and that all models in the portfolio are available for this financing package. “The program benefits all types of BMW buyers from the young professional to the senior executive to the captains of business.”

As for the question of whether customers have proven themselves responsible – as opposed to tragically defaulting – when availing of the very tempting promo, our respondents reveal that, yes, they have.

Mendoza avers: “We think that customers are more responsible about their financial decisions now so we make it a point to offer as wide an array of solutions as possible.” Cruz adds that defaults are “almost nil.”

And, yes, the Drive Now, Pay Later program is an innovative child of competition. “Car companies have to think of ways to bring the client to the showroom,” Cruz says.

People aren’t exactly queuing at said showrooms just yet, but maybe they will pretty soon.