Booking a Tata Nano? Don't Fret

Customers looking forward to being one of the first 100,000 owners of Tata Nano should not be daunted by the long queues that are forming everyday in state-run banks, 400-odd Tata Motors showrooms and Tata Group outlets such as Titan, Tata Indicom, Croma and Westside. (Lsit of all this show rooms will be available Shotly.....)

In order to get the application form, customers need to furnish a few documents such as ID proof and passport size photographs while those who are opting for financing, have to carry additional documents such as half-yearly or annual bank statement as well as income proof as only salaried employees with an annual salary of Rs.75,000 or above and entrepreneurs earning Rs.1 lakh or above annually are eligible for the booking process.

Customers who want to buy the Nano must pay Rs.300 for an application form (the application form costs just Rs.200 if the booking is made online) and then pay the entire cost of the car or get financing from one of 18 banks with which Tata Motors has made special arrangements or with the car maker's financing arm, Tata Motors Finance Ltd.

The interest rate for loans charged at these banks range from 9-14.5 percent (depending on the bank and loan tenure).

The lowest rates are being charged by United Bank of India (9 percent), Central Bank of India (9.5-11 percent) and Canara Bank (9.5-11 percent) while the highest rates are being charged by The Federal Bank (14.25 percent), ICICI Bank (13 percent) and State Bank of Travancore (11.75-12 percent).

Other banks who are also offering financing for Nano are State Bank of India, Corporation Bank, Indian Bank, State Bank of Bikaner and Jaipur, State Bank of Indore, State Bank of Patiala, State Bank of Hyderabad, State Bank of Mysore, Union Bank of India, Punjab National Bank, UCO Bank and Corporation Bank.

Meanwhile, Tata Finance is providing a 100 percent loan for the booking at interest rate of 12-13 percent. According to media reports, though the interest rate is steep, many customers prefer getting loan from Tata Finance as the latter it is ready to come forward and help with loans even if all the banks reject the buyer's application.

For the standard version, the booking amount is Rs.2999 (assuming that the customer is dealing with the State Bank of India). This is progressively higher at Rs.3499 and Rs.3999 for the mid and top-end versions.

Besides this, one has to pay Rs.750 as car loan processing fee and a franking charge of Rs.300.

The Tata Nano comes in three versions - the standard Nano comes with a price tag of Rs.1.23 lakh (ex showroom, Delhi), while the Nano CX (mid-range) costs Rs.1.48 lakh and the top-end Nano LX costs Rs.1.72 lakh.

Tata will accept orders until April 25. Though there is no cap on the number of forms to be sold during the 17-day period, Tata Motors will randomly select 100,000 people through a computerized draw (only one Tata Nano car will be allotted per applicant) within 60 days of the close of bookings. These lucky customers will get the first shipment of vehicles at the launch price. Everyone else will have the option to retain their booking even if they do not get an allotment in the first phase at the initial price. Tata will pay interest on booking deposits: 8.5 percent for people who have to wait one to two years to get their Nano, and 8.75 percent for those who hold out longer.

Tata Motors has also warned that applicants may not get their chosen model or color, due to production constraints. "In case Tata Motors is not able to match the preference, Tata Motors will offer the other available variant. The differential amount will be adjusted at the time of delivery," the terms and conditions mentioned in the booking form said.

The company also said it will refund booking amounts to unsuccessful applicants, minus interest within three months of booking. However, applicants, whose names have been selected through the lucky draw but choose not to go ahead with buying the car, will be charged cancellation fees of Rs.2999.

Tata Motors has also entered into agreements with five insurance companies - National Insurance Co., ICICI Lombard General Insurance Co., Royal Sundaram Alliance General Insurance Co., United India Insurance Co. and HDFC Ergo General Insurance - to offer insurance at a rate of just 2.76 percent of the ex-showroom price of the car, the most competitive in the industry.