BMW cars command premium over Mercs, Audis in pre-owned market

Despite considerably cheaper ownership cost of pre-owned Mercedes and Audi cars, their counterparts from the BMW stable command a premium, according to an industry report.

"BMW vehicles (pre-owned ones) command a premium over Audi and Mercedes even though latter's service cost is 24% and 29%, respectively lower than of the former," said the report by IndianBlueBook -- a Mahindra Group service offering pricing and analytics for new and pre-owned vehicles.

Total cost of ownership of a luxury car is expected to be over 60% of the on-road car price after three years, it said, adding residual value and total cost of ownership are important parameters for luxury car buyers.

Citing a survey, the report said the domestic luxury car segment is still in its nascent stage with only Mercedes-Benz, Audi and BMW brands dominating over 90% of the market.

High-end cars are extremely popular in the pre-owned segment and their certification is an important driver of this segment's growth as their resale value falls by 50% after three years.

The report warned the demonetization drive will have an adverse short-term impact on sales of both new and pre-owned luxury cars.

Online searches for luxury cars account for close to 7% of total luxury car searches compared to 1% share of sales they represent, the report added.