Ariva offers cars to the masses

2012-05-03 20:44

Now everyone can drive a new set of wheels. At least that’s the claim from Ariva, a new joint venture between local automotive industry giant AMH and the JD Group, probably best known for its furniture retailer chains.

Ariva, tapping into the relatively uncharted private long-term rental and leasing field, sees a market to attract would-be car owners declined by the banks for traditional bank approval.

AMH CEO Manny de Canha told a media conference on May 3 2012 that finance problems exacerbated by the National Credit Act and the ongoing global financial crisis had particularly affected the emerging market; bank acceptance of vehicle loan applications had declined across the major banks.


This was, he said, especially true for those shopping in the entry-level auto market (R70 000 to R150 000), typically first-time buyers with no credit history or a poor rating.

David Smith, an executive director of AMH, said Ariva wanted to take the hassle out car ownership. Customers would get the use of a new car (since this is a rental agreement, the car ultimately belongs to Ariva) over 54 months for a fixed monthly charge that included comprehensive insurance, a vehicle tracking system and roadside assistance.

A Premium option would add full maintenance and tyres for the five years; the Lite option servicing only.


Customers applying at any of Imperial's 280 franchises would have their circumstances assessed to determine a monthly payment within their reach and then be invited to choose from vehicles within their payment range. A month's refundable (with interest) deposit was required, the chosen car must cover no more than
25 000km a year and be returned in good condition at the end of the rental period.

In an example presented by Smith, a Kia Picanto purchased in the "traditional way" using bank finance, including the cost of insurance, vehicle tracking and average servicing, will cost R3463 while the same car rented via Ariva will cost from R2861 - a saving of R602.

The deal, Smith said, could also be applied (but over 48 months) to used vehicles less than a year old that had covered fewer than 30 000km.

The downside? You never get to own the car so generate no equity in it for a future trade-in.