Used Cars

Used cars sector in India has emerged as one of the major industries due to its easy accessibility and lower rate of interest. According to the industry analysts, the sales of used cars are likely to boost up in the next few years. Infact in the last fiscal year, more used cars were transacted 10% more than the new ones, according to the assessment by Maruti Suzuki India Ltd. and Honda Siel Car India Ltd.

Growth in Used Cars Industry

As per the estimates of the car financers, the used cars industry is expanding at 25% - 30% against the 13% growth of the new car sector. In FY 2008, Indians purchased 1.5 million used cars compared to the 1.6 million new cars. According to the latest statistics, Maruti and Honda traded 66,000 and 2,769 used cars respectively. This indicated a 45% increase in their sales against the 2007 sales.

In the past few years around 55 latest used cars models have been launched in India. This trend is likely to sustain and expand in India till the car manufacturers bring in Rs 36,000 Crore into Asia's third biggest car market. This speedy expansion in used car sector over the last thirty years has taken place due to lower interest rates compared to the new vehicles.

According to a latest analysis the yearly used car demand in the Indian market is around 1.4 million cars. To benefit from the flourishing trend leading organized manufacturers like Automartindia Ltd and Maruti's TrueValue have made a foray into the used car business. Unlike other unorganized companies, they provide guarantee of accurate ownership and accident certification to their customers and vendors along with superior quality and benefits like warranty period and free repair services.

Advantages of buying a used car

Purchasing a second hand car has lot of benefits. Some of them are listed below:

  • The value of a used car is considerably lower than a new car,
  • The depreciation cost is lesser as compared to the new car,
  • Used car loans are simpler, easily available and cost lower than the new car loans
  • Used car can be modified according to the owner's preference.
Major used car dealers in India

Some of the renowned and licensed used car dealers in India are -

  • Maruti TrueValue,
  • Honda Auto Terrace,
  • Ford Assured,
  • Toyota U Trust,
  • Hyundai Advantage,
  • Mahindra and Mahindra's First Choice
Indian used car market is yet to witness the launch of many more models that are likely to quadruple the sector's revenue in the next five years.

Used Car Retail market in India

For retailers, the licensed used car outlets provide the finest market cost besides meticulous evaluation by professionals and an alternative to select from any other car short-listed in the car-maker's portfolio. These certified retail outlets also provide extended warranty period to its customers on the basis of the brand outlet, used car insurance, assistance tariffs, utilization of OEM parts during the repair services, delivering world-class quality and detailed inspection by expert technicians. In addition, the purchasers get to drive back a car at attractive price after getting concession from the manufacturer.

Industry experts believe that 51% of the used car sales will be included under the structured car market by FY 2014. Keeping this in consideration, Mahindra is laying market strategies to enhance its retail numbers to 300 outlets in the next 3-5 years. Maruti TrueValue has already set-up 275 retail outlets in the country and is all set to raise the numbers to a few hundred more in the coming years. Other car-makers are also willing to follow the trend and are planning to extend the used car retail outlets into II tier metropolis in a short span of time.

Car makers have realized the potential of used car market and making it mandatory for their wholesalers to operate used car outlets also. Besides exhibiting multiple brands, the branded used car retailers are also offering one-stop shop for all inquiries.

Last Updated on 1/3/2012