More car for your money? It’s possible. Plenty of new models in the used car market have made it easy for car owners to trade up at a good bargain. At the same time, manufacturers are also happy, since this means that more new cars will disappear from showrooms now.
Traditionally dominated by economy hatchbacks, the used car market is now seeing a big chunk of buyers upgrading to premium hatchbacks and sedans such as, the Hyundai i10, Accent, Maruti Swift, SX4, Ford Fiesta and Honda City. Also, car owners are now opting for a quicker replacement.
Sample this: Almost 80% of customers who buy a new car intend to sell it within five years, a survey by JD Power revealed. Compare this to a time when nostalgic car owners would cling on to their prized set of wheels for more than seven to eight years.
Says Shubhabrata Saha, CEO of Mahindra First Choice Wheels, “The Honda City is a current favourite. A used car buyer usually looks for value for his money. Hence, trading up is a logical phenomenon.” And why not, when for the price of a new car you can bring home a well-maintained pre-owned car from a certified retailer and that too, with a one-year warranty and all the frills
"The question for a car buyer is whether he can get a better car within the budget that he has set aside for a small car," explains Maruti Suzuki chief GM (sales support) Ravi Bhatia. "The recent availability of new models in the used car market has answered that question," he adds.
For instance, now it is possible to buy a relatively new one-year-old Rs 8 lakh plus Honda City ZX GXi for around Rs 6 lakh. And a well-maintained few-months-old Rs 5.5 lakh Maruti Swift VDI (diesel) will cost you roughly Rs 4 lakh.
Also, the rising number of compact and fuel-efficient models in the new car market now means that the used car market is no longer limited to first time buyers. In fact, the domestic pre-owned car market, which is almost as big as the new car market, has been growing at 20% y-o-y.
Last year, nearly 1.1 million used cars were sold in the country. In comparison, the new car market has been woefully stagnant for quite some time now. That means that a third of new cars sales last year were facilitated by the movement of used cars. Only 10% of the total pre-owned cars sold in the market are through the organised used car business.