The city's expanding middle class has bought into the great Indian dream of car ownership big-time. More than 130 new cars are registered in the city every day. But ‘four-wheeler aspirations' have also giving thrust to the used car market.
Though an increasing number of the city's residents are opting for used cars, many grapple with questions of trust, reliability and the necessary procedures for transfer of ownership.
Approach original manufacturers
M.K. Subramanian, Secretary of the Automobile Association of South India (AASI), says that first-time car buyers who prefer a second-hand vehicle are better off approaching the original manufacturers, most of whom have a ‘pre-owned' section. “Some of them offer warranty and are slightly better regulated. Earlier, there used to be just brokers who used to adjust the speedometer and retouch the vehicle to hide accident dents.”
He says that though most vehicles in the used car segment are “fairly young” these days, it is always better to take a mechanic to check the engine condition before buying.
G. Nagarajan, Mechanical Engineering professor at Anna University, says that buying a car that has clocked less than 25,000 km is ideal.
Regarding transfer of ownership costs, Mr. Subramanian says that it can be done for just Rs.131. “Vehicle owners must stop approaching agents. Most pay Rs.2,000 to an agent just because they don't want to go stand in a queue. It is a simple procedure.”
A majority of used car customers are those who are looking for a bridge between a two-wheeler and their dream car. Navarathina Vel, Assistant Manager (Sales), Maruti True Value, says that many opt for an entry level second-hand vehicle to learn driving on the city's congested roads. “Some buy a secondary low-budget car for their spouse.”
The Rs.1.5 – Rs.2.5 lakh price range attracts the maximum number of customers, he says. “We sell between 500-550 used cars every month in the city. The advantage of a relatively new used car is that the loan down-payment would be significantly lower and the car comes along with fittings and accessories,” Mr. Vel adds.
Rising affordability
The growth in the used car market is directly related to the increasing ability to afford and rising demand for the latest variants. Abu Bakkar, for example, is trying to sell his third car. After using a BMW for just one-a-half-years, he says “I'm now looking for a new experience. It is about going up the ladder. I will buy a better car and I'm also looking to customise it.”
He has opted to sell the car on his own without approaching a dealer. “There are enough buyers. Since the new car market is growing so rapidly, naturally it will reflect on the used car segment as well,” he says.
Foreign Consulates interested
With many relatively new, premium segment cars flooding the used car market, even foreign Consulates based in the city have started showing interest in purchasing them. A senior British High Commission official said that the main reason why pre-owned cars are preferred for “immediate use” is because it makes resale easier. “When an imported model is resold locally, the buyer will have to pay an additional duty. The procedure is a hassle and also time consuming.”
He adds that since a recent directive has put a ban on right-hand driven vehicles from being imported, embassies are going in for second-hand premium-segment cars for short-term use.
