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Old 31st December 2013, 16:55   #1
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Default ARTICLE: Buying a New car with an Older manufacturing date

In various discussions on the forum, we have seen poor punters getting mutton being passed off as lamb. i.e. older cars passed off as new. From a consumer standpoint, the car is new but in reality, it is as old as the day it rolled off the line.

ARTICLE: Buying a New car with an Older manufacturing date-unsold-cars.jpg

Although our Team-BHP PDI list and VIN guides should assist you in not getting fobbed off, you might find great deals in old inventory too. What happens if there is a wallflower that appeals? A deal that is too good to be true? Well, it's fair to say that not all non-sellers are bad cars, so let us take an in-depth look into this.

Why would one consider this?
  • Great savings – Sometimes there are good cars that lack market appeal

Why you might want to run?
  • Such cars might be difficult to sell in the used market, due to lack of market appeal.
  • High depreciation, since they were never wanted.
  • Niggles that creep in due to long periods of storage.
  • Dealers use such cars for customer test-drives (with their odometer disconnected). These are inevitably abused.

The objective of this guide is to

1. Help assess what to look for, in addition to the PDI.
2. What needs to be factored into negotiating the price. The dealer will tell you "like new" and stories like it has been kept in a hospital-like environment, but that may not be the case.

While we cannot deal much with market perception without starting a fanboy club, we can at least highlight potential risks and how to mitigate them.

So, what typical cars do we find sitting in the inventory?

Note: This list is based on past data and is subject to change.
  • Overstretched Brand Victims– VW Passat, Hyundai Sonata, Maruti Kizashi
  • Victims of Poor Forecasting & Overproduction- VW Vento
  • Victims of poor marketing – Renault Fluence
  • Overpriced – Fiat 500, VW Beetle
  • Unloved Petrol Equivalents – BMW 523 / 320i, Polo 1.6
  • Unloved CKDs– Chevrolet Captiva
  • Unloved – Chevrolet Sail, Spark, Fiats, Tatas of all shapes and sizes
  • Dudso's - Verito, Quanto

Last edited by Aditya : 20th February 2014 at 16:02.
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Old 31st December 2013, 17:00   #2
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Default Before you commit

For the purpose of discussion, I will assume old stock to be something greater than 6 months, but will highlight things that might be apparent between 3-6 months.

One needs to be aware about:

1. Variant Changes - what does the latest version have that the old stock doesn't.

2. How and where is the car stored, and for how long?

Although the Team-BHP PDI list should cover inspecting the car, we need to also look at addressing issues that might be unseen due to prolonged storage.

The most important addition is to see where the car was stored, how long for and under what conditions. If in a dusty or moist area, expect more corrosion and contamination. If stored on concrete ground, that would be a lot better.

If the car has been half jacked up or parked half in a large crater, this could create uneven wear or even distortion through a phenomenon called "creep" on the car's structure.

If both 1 and 2 are acceptable, it is then worth doing a drill-down beyond a PDI to ascertain what needs to be done & decide on what should be paid. Let's look at the various components one by one.

Last edited by Aditya : 20th February 2014 at 16:06.
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Old 31st December 2013, 17:04   #3
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Default Bodywork

If the car has been stored for 3 months – Check for storage damage.

If the car has been stored outside 6 months - Oxidation of paintwork + clearcoat deterioration.

Note: Some cars (e.g. VW, Skoda) come fully covered in a polyfilm, so are totally protected.

Minor damage might be repairable, but the issue of surface oxidation / clearcoat might need to be addressed.

The dealer might throw in a detailing or Teflon coating, but these are band-aids. The body work might need more than just a waxing job and can require paint protection. Factor in the cost of paint protection treatment into the price.

Some key walkaway indicators would be if rubber parts are rock hard and brittle. Check wiper blades, bumper inserts, window seals and assess their condition.

Interiors:
  • Check for mildew.
  • Lift carpets and boot floor to check for water leakage or water accumulation.
  • Check that the door seals have not gotten stuck to each other.

Last edited by Aditya : 20th February 2014 at 16:10.
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Old 31st December 2013, 17:06   #4
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Default Engine and Transmission

Engine:

3 months - Not much to worry, but check for leaks if any.
6 months - Surface corrosion and associated seizures.

Note, if it is a turbo engine, watch out for perished seals and hoses. It might be difficult to identify these, but you must factor in these costs.

A key indicator would be the under-bonnet foam insulation. If brittle and powdery, expect to budget for a replacement and do a thorough check on rubber parts.

Actions: The best safeguard is to ask the dealer to start the engine directly in front of you for the first time and listen. 90% of the time, it will be okay, but there is that odd chance something might have seized.

Check what comes out from the exhaust. Steam from cold is acceptable. Anything blue or white? Walk away! If you hear anything sounding oddly mechanical, walk away.

Actions: Budget an early engine oil / filter change within 3,000 kms if the first service is some time away.

Transmission:
  • Gears & linkages could seize. Ideally, the car should be left in neutral during storage.
  • Surface corrosion of flywheel facing could increase clutch wear slightly. Autobox transmission fluid could absorb some moisture (storage greater than 6 months).
Actions: Factor in a 10% clutch replacement cost or a transmission fluid change within 30,000 km.

Last edited by Aditya : 20th February 2014 at 16:15.
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Old 31st December 2013, 17:12   #5
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Default Electrical and Air Conditioning

Electrical:

Connectors corrode as do sensors. We also have the problem of rodent damage. This could lead to short circuiting. Check that all electrical equipment works.

Actions:
  • Check all gadgets and accessories and ensure that nothing jams / no fuses blow.
  • Ensure a complete diagnostic check is performed and get a written clean bill of health.
Air Conditioning:

If stored for 6 months, unused ducts can lead to bacteria forming and also strange odours. If the car was parked in a dusty area or near trees, the filters and trunking can get leaves and dust accumulation.

A/C gas leaks can happen if the unit is not used as the refrigerant also acts as a lubricant.

Actions: Insist on re-gassing the A/C unit. Monitor the air-conditioning performance and refrigerant levels closely. Factor these consumable costs in.

Last edited by Aditya : 20th February 2014 at 16:19.
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Old 31st December 2013, 17:15   #6
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Default Brakes and Suspension

Brakes:
  • If stored 6 months - The discs might have some surface corrosion, leading to rapid pad wear while bedding down and removing the surface rust. Handbrake mechanism, if used, could seize and might need to be freed up.
  • If Stored 1 month – The handbrake, if used, could mildly seize. It usually gets released when the car sets off from rest.
  • Brake fluid is hygroscopic and absorbs moisture.

Actions: Check that brakes are thoroughly cleaned on delivery. The surface corrosion will get abrased by the pads, but expect the first set of pads to wear a little faster.

Monitor brake seals for any leakages, in case a seal has perished.

Budget 20% of pad cost due to rapid wear + additional brake cleaning during the first service. Also factor in an early brake fluid change if the car has been in storage for 6 months.

Suspension:

With the exception of air / pneumatic suspensions, nothing much to be expected, although the suspension will creak due to lack of use until it is bedded in.

However, if the car has been stored half jacked up, half in a pothole or similar, the suspension loading might be uneven, leading to misaligned settings, since the components can get slightly distorted.

If the car has been stored on level ground, it should be fine. Some suspension lubrication might be required as part of the PDI. Check air / hydraulic suspension thoroughly for leaks and slow operation.

Last edited by Aditya : 20th February 2014 at 16:26.
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Old 31st December 2013, 17:18   #7
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Default Fuel and Coolant

Fuel systems:

Petrol - 3 months, it should be okay. 6 months, the fuel could have deteriorated and gotten contaminated. Fortunately, dealers rarely store cars with a full tank, so the first thing to do is fill the car up with fresh petrol.

Diesel - This is a tricky one. The big danger is water content. If the car has been stored for more than 6 months, one needs to consider whether the filter will be up to the job.

Action: For petrol cars, factor in an early fuel filter replacement during the next service. In the case of diesel cars, insist on a new filter being fitted before delivery.

Coolant:

Coolant serves not just a cooling role; it is also a lubricant for the water pump and a rust inhibitor for the cooling system. During the storage time, all it does is inhibit rust. So, if the car has been stored for 6 months or more, factor in a coolant change within a year.

Last edited by Aditya : 20th February 2014 at 16:28.
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Old 31st December 2013, 17:19   #8
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Default Tyres

If left for more than six months, tyres can flat-spot, leading to uneven wear and also stress defects.

Action: Check tyre pressures and inflate to maximum pressure (as stated on the sidewall). Take an extended testdrive for 150 km to allow the tyres to warm up and assume the required shape. Let the tyres cool down, bring the tyre pressure to the rated value and re-balance wheels.

If no luck, you might need to consider a new set of tyres.

Test Drive:
  • Check that all equipment works.
  • Check the speedo reading and that it works. Orphans are sometimes put to work unofficially.
Listen for sounds like:
  • Droning of seized bearings.
  • Hissing of air leaks.
  • Whistles from wind noise due to perished rubber.
Look for smells:
  • Seized brakes.
  • Musty air conditioning.
  • Damp carpets.
Make sure there is not much bump thump from misshapen tyres. Check alignment.

Stiff gears and controls can be fixed.

Last edited by Aditya : 20th February 2014 at 16:36.
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Old 29th January 2014, 16:18   #9
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Default re: ARTICLE: Buying a New car with an Older manufacturing date

Concluding:
  • Old stock means the car was not a favorite. So, expect poor resale.
  • Expect minor niggles.
  • Make an assessment based on the above factors and negotiate hard. If no joy, twist his arm for additional warranty cover. Note this only works if the dealer has enough business to remain viable. If it is a Fiat or Mitsubishi franchise, they might not be around to honour that commitment.
  • Check the warranty terms carefully and make sure it is valid from the date of delivery. One VW dealer has tried the trick of starting warranty from the date the car left the factory (and not the actual delivery date).

Last edited by Aditya : 20th February 2014 at 16:38.
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Old 29th January 2014, 16:41   #10
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Default re: ARTICLE: Buying a New car with an Older manufacturing date

Thanks for the detailed post! I was wondering if you could also comment on the idea of buying a used car from out of state and what it means from the RTO angle (taxes, process, things to watch out for).
Typically a lot of unusual cars seem to be in Mumbai/Delhi and for someone like me in Bangalore, I am not sure if it is practical to buy them and drive them down? Will I end up with a RTO nightmare?
Thanks!
(my first post ever, woo-hoo!)
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Old 30th January 2014, 21:09   #11
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Default re: ARTICLE: Buying a New car with an Older manufacturing date

A colleague of mine was looking at a Fiat Linea MJD emotion pack that was lying at the yard for around 7-8 months. It was a Jan 2013 car and the dealer was giving a very good discount.

My colleague asked me to take a look at the car and asked for my approval. Unfortunately the car was stored in the open and was baking all the while.

I took a close look at the car and found the following:

1. Rubber beading on the roof and around the front windshield was hard.
2. Wiper blades were hard.
3. Under the hood there was rubber beadings and wire ties of rubber that had started to crack and were brittle.
4. Battery was completely flat
5. very small rust spots on the boot lid
6. tweeter grill had faded in colour from beige to white
7. seats did not look new

Going through the car with a fine teeth comb I just did not have the heart to give the green signal and told him that it was entirely his choice but I would not look at a car with the above issues. In the end it was upto him and if he had budget constraints but wanted the Linea then he should look at this car.

He decided against it and I think it's the right choice.

If the dealer had stored this car indoors, half the issues mentioned above would not be present and I would have had no hesitation in telling him to pick the car.

If they have inventory why can't they come up with proper storage space.
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Old 30th January 2014, 23:05   #12
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Default re: ARTICLE: Buying a New car with an Older manufacturing date

Quote:
Originally Posted by Vid6639 View Post
He decided against it and I think it's the right choice.

If the dealer had stored this car indoors, half the issues mentioned above would not be present and I would have had no hesitation in telling him to pick the car.

If they have inventory why can't they come up with proper storage space.
I am happy that your friend didn't go with the car!

This is the reason I too find strange with the dealers regarding the storage practices of cars till they are sold. I have seen Maruti dealers store cars on the road (2-3 feet away from moving traffic ).

I work in an FMCG industry and know what changes does sunlight and improper storage practices lead to the product and can relate the same to a car. The other thing is that don't the company heads/subordinates have dealer audits to check on their performance where inventory storage is a big factor to concentrate on?!

Anurag.
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Old 31st January 2014, 09:35   #13
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Default re: ARTICLE: Buying a New car with an Older manufacturing date

Quote:
Originally Posted by ajmat View Post
[*]Make an assessment based on the above factors and negotiate hard. If no joy, twist his arm for additional warranty cover. Note this only works if the dealer has enough business to remain viable. If it is a Fiat, Mitsubishi or a recent Skoda dealer (judging by recent sales ), they might not be around to honour that commitment
Is the extended warranty applicable only at the dealer? What I thought was that the warranty is honored nation wide over any dealer. Ain't it true?
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Old 31st January 2014, 09:39   #14
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Default re: ARTICLE: Buying a New car with an Older manufacturing date

Quote:
Originally Posted by ank.nsit View Post
Is the extended warranty applicable only at the dealer? What I thought was that the warranty is honored nation wide over any dealer. Ain't it true?
Good point, your statement is true if the warranty is offered by the manufacturer but if it is offered by the dealer then you need to tread cuatiously
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Old 31st January 2014, 09:53   #15
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Default re: ARTICLE: Buying a New car with an Older manufacturing date

Quote:
Originally Posted by ajmat View Post
Good point, your statement is true if the warranty is offered by the manufacturer but if it is offered by the dealer then you need to tread cuatiously
I never knew there was something like "dealership offered warranty". Thanks for enlightening me.
As such most of the dealers tend to find ways to escape out of manufacturer's warranty, I hardly doubt if they will ever honor a warranty which will have a direct impact on their pocket.

The only reason I could think of buying an old stock is the huge Cash Discount.
If one wants to keep the car for long (7-8 years), then the difference in re-sale value on an year old model is insignificant.

More often than not if there is an inventory pile up at one dealer, the same will be the case at other dealers as well. In such cases, one can search for a dealership with covered stock storage space.

And then when a good car to his satisfaction is found, just press really really hard for cash discounts. I say cash discounts because many a times dealers tend to offer free accessories. The actual worth of these accessories comes out to be much less (even 0 if that was the accessory which you were never going to install anyway) as after market shops will provide the same accessory at a cheaper rate & buying in an after market shop will give the flexibility of making a choice.
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