Second-hand car market booms in times of inflation

INFLATION WOES: Lot of people these days are opting for second-hand cars.

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Keywords: Inflation, Maruti

New Delhi: In times of high inflation, when the value of money depreciates everyday, it is good to look for alternatives. It is for this reason that a used car may be as good as a new one these days.

With interest rates climbing uphill and inflation refusing to cool down, the dreams of buying that dream car takes a backseat. But, there is a solution. One could opt for a second-hand car.

“In the last three months, the customer has experienced the credit crunch and has experienced a rise in fuel prices. A segment of those customers have traded their requirements down. And those who have traded their requirements down, still end up buying a used car. So, we have seen an increase flow of traffic in the used car business. In the last three-months our business has grown 31 per cent,” says Maruti, True Value, Ravi G Bhatia.

According to the JD Power survey, people change their cars within five-years and with the second-hand car market expected to grow at 12-15 per cent in the next five years to touch a robust 2.5 million units and a turnover of Rs 50 thousand crore, there is enough for everyone. And with 70 million two-wheeler users in India expected to migrate to cars, the used car market with its lower cost, is now emerging as a preferred choice.

They say when one buys a car, one should test it by getting behind the wheel. But common perception says, that in case of the second-hand car, one could land up a few extra inches behind the wheel.

However, with the boom in the second-hand car market encouraging more and more big players to enter the market, one can be sure of a smooth drive.

Here are some facts that will further build confidence in the second-hand car market.

• In the US, 50 million used cars are sold per year as against only 16 million new cars.
• In India, the used car market is as big as the new car market, as 1.5 million cars are sold every year.
• Also insuring a second-hand car is now a reality with banks tying up with dealers.
• Corporates too contribute to this high turnover in car ownership with about 30-35 per cent of the pre-owned cars being offloaded by companies.

However, one must be sure of a few things before buying a second-hand car.

“One must see that the car has not had an accident. One must look for welding marks to see if it has been worked on. One must also note the mileage of the car,” says Auto Analyst, Murad Ali Baig.

However, if one wants to sell an old car and one is confused about the price to quote, here are a few factors that will help one determine the cost of your car.

• The age of the car is the foremost thing that a buyer will look for with a close watch on the mileage
• One will also look for the condition of the tyres.
• The cosmetic appeal is also an important factor.
• The number of owners the car has had will also depreciate the value of your car.
• The colour of your car could help you fetch a better price. Cars with colours like white, silver and gold can fetch easy buyers.

Meanwhile, if one is buying or selling a pre-owned car, one can be assured of the best deals and appropriate help from professionals with the boom in this sector.