Used car business in India
Research suggests that buying a used car would save you a lot of money. Better yet running a car for longer years could save you even more money. When it comes to cars before we can start a discussion on used vs new something else comes up. What about the roads? Where is the parking space? It is only natural. I have to bring a quote of Sidhu to your attention which almost answers all your questions.
In England people drive on left. In India people drive on what’s left. – Navjot Singh Siddhu
That is the universal Indian truth. Now that we got that important thing out of our way, let us shift our focus to the discussion on hand. If you are planning to buy a car which one would you buy? Used or New?
In the US there are website’s (Kelly blue book) which allow users to check for the going rate for let’s say a 1999 Honda Civic. This will give a good bargaining power for both the buyer and the seller. The same kind is not available in India. This gives way to information asymmetry. Which gives the seller an unfair advantage and the buyer a disadvantage.
Other important thing to look for is the mileage tampering. Called as lemon check – if someone is willing to spend $25Â he/she can get a complete record of the car’s mileage recordings at various times between owners and possible accident history too. Indian car market lacks this information. The nascent Indian market along with a lack of centralized database makes it difficult to buy a used car in India.
Now to the the other side of the coin. Maruti Suzuki already offers Maruti certified used car at its outlets. These cars typically come with a 1 year guarantee and other goodies not easily available from the unregulated market. Tata Motors has launched its pre-owned car business. It will be offering cars with one year warranty, 3 free services. The cars will be less than 5 year old and accident free.
To add another twist to the story, every 5 minutes a car is posted for sale on Sulekha.com. The average holding of the car by a single owner came down from 8 years to 4 years. People are changing cars more frequently. Thanks to the launch of new models every other month. An average of 3500 used cars are sold on sulekha every month.
I have presented the two sides of the story. I still stick to my version one that you have to get extremely lucky to find a good used car. Couple of years back I started my search for a used car and looked around. I couldn’t find a good car or I haven’t looked hard enough and bought a Swift instead.
That is my story. What is your used car story?
PS : I have used the term ‘used car’ throughout. The more politically correct term is pre-owned. I can’t always be politically correct.
*Image source : Jeffrey B