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As the market for pre-owned cars burgeons, some organised players offer us a perspective on why the big car players have also joined the used-car bandwagon.

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What are the primary reasons for which a person might want to buy a pre-owned car? For most people it proves to make eminent sense on the budget front, according to Nilesh Shah, asst. general manager,  Tata Motors Assured, which deals in the sale of such cars.

“Used cars are invariably an excellent value proposition because a new car loses up to 50-60% of its market value within three years of its sale. For many customers who want to switch to a higher level of car but who can’t afford the market rates, buying a used car makes budget sense. Secondly, for those seeking additional cars to add on for family members who drive or need to be transported, pre-owned cars are extremely useful.”

Car expert Manish Jala has a different angle for the desirability of used cars. “Taxes on the registration of a new vehicle prove to be much higher than they are for a used vehicle. When you add that to the fact that almost every car company has recently increased the prices of their cars, you have an inflationary scenario taking place in the acquisition of new vehicles. No wonder that the market for pre-owned cars, which come at a cheaper rate, is growing all over the country.”

Jala points out that even luxury car manufacturers have joined the bandwagon of providing pre-owned vehicles to customers because there is a burgeoning demand for such vehicles. “For any company a used car customer is a potential new car-buyer especially if they are satisfied with the results they have got out of their used cars. No wonder companies are lining up exchange programs whereby one can trade in an old vehicle to the company to buy a brand new model at a hefty discount. It has been calculated by some studies that up to 34% of car buyers nowadays are replacement customers who will trade in an old vehicle for a new one.”

What are the primary concerns that customers face when buying a pre-owned car? According to Amar Seth of Shaman Used Cars Pvt. Ltd., irrespective of the brand or model being bought, it’s the paperwork that comes with a used car that needs to be looked into most thoroughly. “One has to make sure that the car is ‘clean’ and that it has no bad history with regards to it being stolen or having irregular registration processes.” Adds Shah, “One has to make sure that there’s no overdraft involved in the purchase of the car or any collateral involved. Of course the overall vehicle condition is very important with regard to the mechanical aspect as well as issues like the transmission. One has to be certain that it’s not been involved in any major accident either.”

With more and more respectable and organised players having entered in the sales of pre-owned cars, the business is gradually taking some semblance of an industry. A far cry from the days of fly-by-night operators and untrustworthy dealers that it was the domain of even a decade ago. Industry leaders offering certifications of the used cars they sell and certain services alongside may just ensure that the sunrise of the used car industry is at hand.
 

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