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Old 27th June 2012, 15:33   #106
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Default Re: An upside to the petrol price hike : Used car residuals CRASH

Considering the present scenario, the best deal a petrol car owner can get is to :

1. Sell current petrol car at loss
2. Buy used petrol car from a segment higher with minimal additional cash outflow
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Old 27th June 2012, 15:42   #107
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Default Re: An upside to the petrol price hike : Used car residuals CRASH

I don't think the values of used petrol cars are going down by all that much just as yet. Here is why.

In a free market, if demand drops, prices fall. Thats the theory. It happens if supply remains constant. However, if supply matches demand closely, then prices will not fall by all that much. And this is what I see happening to petrol cars. Those of us who want to trade/sell petrol cars are as likely to accept a lower price as we are to hold the car back from the market. This restricts supply, and hence will prevent prices from falling by very much.

Another thing to consider is a collective behaviour by used car dealers. If all used car dealers are sitting on stock bought prior to the petrol price hike, they are not very likely to dispose off the stock at a loss. If all of them together decide to not sell at a loss, then price in the market will not fall.

I think it will take a few months for the fall in prices to become widely prevalent.
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Old 27th June 2012, 16:00   #108
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Default Re: An upside to the petrol price hike : Used car residuals CRASH

Petrol prices to come down by Rs.4 from July 1st. Will that change the general sentiment about petrol cars?
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Old 27th June 2012, 16:24   #109
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Default Re: An upside to the petrol price hike : Used car residuals CRASH

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Originally Posted by Daewood View Post
Petrol prices to come down by Rs.4 from July 1st. Will that change the general sentiment about petrol cars?
Only to be increased at a later point of time.

With the way the Re. is falling against the $ the prices are definitely going to rise in the later part of this year.

The sentiments may hardly change though
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Old 27th June 2012, 21:17   #110
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Default Re: An upside to the petrol price hike : Used car residuals CRASH

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Originally Posted by KiloAlpha View Post
I don't think the values of used petrol cars are going down by all that much just as yet. Here is why.

In a free market, if demand drops, prices fall. Thats the theory. It happens if supply remains constant. However, if supply matches demand closely, then prices will not fall by all that much. And this is what I see happening to petrol cars. Those of us who want to trade/sell petrol cars are as likely to accept a lower price as we are to hold the car back from the market. This restricts supply, and hence will prevent prices from falling by very much.

Another thing to consider is a collective behaviour by used car dealers. If all used car dealers are sitting on stock bought prior to the petrol price hike, they are not very likely to dispose off the stock at a loss. If all of them together decide to not sell at a loss, then price in the market will not fall.

I think it will take a few months for the fall in prices to become widely prevalent.
Petrol price is never going to come down any time soon. You can keep your petrol car for a few more years and then sell it at almost scrap value or sell it off now at the current market rate. Going by the number of petrol cars being put up for sale nowadays used car dealers are not going to hold their stock much longer as their money and space is getting blocked. The only way petrol cars can regain some resale value is if the government introduces special taxation for diesel vehicles or the introduction of dual pricing of diesel.
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Old 29th June 2012, 11:31   #111
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Default Re: An upside to the petrol price hike : Used car residuals CRASH

OT, but I would like to point out something. A buyer can lay his hands on a Skoda Laura/VW Jetta for the price of a new Swift ZDi. But can he afford its maintenance(servicing/spares)?

Heck, even a first time buyer with a budget of 1-1.5L can be tempted into buying a Ikon/Baleno or even an Optra, for that big car feel. But will he(in many cases) able to foot the fuel bills,let alone the service & spare costs? It is a known fact they are gas guzzlers.

Will he not be better off with an Alto?

The fuel pricing is giving us very tempting deals sure enough but I think we also need to factor in the fact that a car from a higher segment will also have higher service costs despite a low price tag.

PS: Its just my humble opinion, no offence to anyone.
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Old 29th June 2012, 11:41   #112
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Default Re: An upside to the petrol price hike : Used car residuals CRASH

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Originally Posted by ashis89 View Post
OT, but I would like to point out something. A buyer can lay his hands on a Skoda Laura/VW Jetta for the price of a new Swift ZDi. But can he afford its maintenance(servicing/spares)?
Forget the Laura and Jetta , its not easy to maintain a polo or Fabia which is more than 3 year old. Average maintainance is around 15K for a 3-4 year old single hand used Fabia/Polo.
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Old 29th June 2012, 11:41   #113
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Originally Posted by ashis89 View Post
OT, but I would like to point out something. A buyer can lay his hands on a Skoda Laura/VW Jetta for the price of a new Swift ZDi. But can he afford its maintenance(servicing/spares)?
+1 to that.
This has been discussed already in detail in many used car threads. GTO's comment that even if you buy a Rs.15-20 Lac car for 5-6 Lac but when it goes for servicing and repairs it still remains Rs.15-20 Lac car sums it up.
To make matters worse, parts are not available OTC for most of these cars resulting in further more harassment.
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Old 29th June 2012, 11:45   #114
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Default Re: An upside to the petrol price hike : Used car residuals CRASH

In these times, I think the best bet IMHO is the Civic. Not so expensive to maintain and source the parts, relatively has good FE (wouldn't even think of converting it to CNG), has the fun to drive factor and looks luxurious enough. An all rounder at a great price (especially some of the ones you see in Mumbai through CarWale.)

Last edited by rosh_aveo1.4 : 29th June 2012 at 11:58.
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Old 29th June 2012, 13:04   #115
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Default Re: An upside to the petrol price hike : Used car residuals CRASH

Quote:
Originally Posted by ashis89 View Post
OT, but I would like to point out something. A buyer can lay his hands on a Skoda Laura/VW Jetta for the price of a new Swift ZDi. But can he afford its maintenance(servicing/spares)?

Heck, even a first time buyer with a budget of 1-1.5L can be tempted into buying a Ikon/Baleno or even an Optra, for that big car feel. But will he(in many cases) able to foot the fuel bills,let alone the service & spare costs? It is a known fact they are gas guzzlers.

Will he not be better off with an Alto?

The fuel pricing is giving us very tempting deals sure enough but I think we also need to factor in the fact that a car from a higher segment will also have higher service costs despite a low price tag.

PS: Its just my humble opinion, no offence to anyone.
If one is looking to move up to a higher segment then these low priced used petrol cars can be a really good option. You get a year old car of the desired segment (sometimes higher segment also) for almost half the price of a new diesel car of the same segment. Depending on your annual mileage that money saved can fuel the petrol bills for many years to come. You don't have to worry about residual value since you have already bought it at a highly discounted price. Meaning to say the maximum damage has already been done!

Most of the petrol cars out there are the Marutis, Hyundais, Hondas and Toyotas. These petrol cars are almost maintenance free and require almost no attention for a very long time.

My experience with the Toyota Corolla was that maintenance cost was lower than the Hyundai Santro . Spares and labour are very reasonably priced.
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Old 29th June 2012, 14:35   #116
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Default Re: An upside to the petrol price hike : Used car residuals CRASH

Quote:
Originally Posted by rosh_aveo1.4 View Post
In these times, I think the best bet IMHO is the Civic. Not so expensive to maintain and source the parts, relatively has good FE (wouldn't even think of converting it to CNG), has the fun to drive factor and looks luxurious enough. An all rounder at a great price (especially some of the ones you see in Mumbai through CarWale.)
Though I agree with most of the part mentioned in the post but from what I gather from other threads on T-BHP, I believe Civic is kinda 'Notorious' for low mileage with some owners, and that, IMO is the main reason for the poor resale value of the Civic which otherwise is a really a brilliant car.
http://www.team-bhp.com/forum/indian...ml#post2820542 (The Diminishing Value of D1 Segment Sedans (Altis, Cruze, Civic, Laura et al))
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Old 30th June 2012, 04:49   #117
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Default Re: An upside to the petrol price hike : Used car residuals CRASH

Quote:
Originally Posted by ashis89 View Post
OT, but I would like to point out something. A buyer can lay his hands on a Skoda Laura/VW Jetta for the price of a new Swift ZDi. But can he afford its maintenance(servicing/spares)?

Heck, even a first time buyer with a budget of 1-1.5L can be tempted into buying a Ikon/Baleno or even an Optra, for that big car feel. But will he(in many cases) able to foot the fuel bills,let alone the service & spare costs? It is a known fact they are gas guzzlers.

Will he not be better off with an Alto?

The fuel pricing is giving us very tempting deals sure enough but I think we also need to factor in the fact that a car from a higher segment will also have higher service costs despite a low price tag.

PS: Its just my humble opinion, no offence to anyone.
I completely agree,about 8-10 months back an acquintance with a budget of around 1.5L,got a 11 year immaculate accent for 1.4L,only to be put off by fuel bills within a month,due to non availability of CNG,i saw him running towards LPG.
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Old 30th June 2012, 08:11   #118
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Default Re: An upside to the petrol price hike : Used car residuals CRASH

That descriptopn seems to fit me nicely! I was looking around, and I am tempted by an Ikon 1.6zxi 2004, selling well under 1L. I am bracing myself for fuel bills to the tune of 4k per month.

Maybe I am insane, but the way I see it, I get a great drivers car at a cost very less than even an alto lxi of the same year. The difference in fuel bills between the alto and the Ikon will close that gap, maybe in 2years, which is more than what I plan to keep the car...

Quote:
Originally Posted by ashis89 View Post
Heck, even a first time buyer with a budget of 1-1.5L can be tempted into buying a Ikon/Baleno or even an Optra, for that big car feel. But will he(in many cases) able to foot the fuel bills,let alone the service & spare costs? It is a known fact they are gas guzzlers.
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Old 30th June 2012, 08:52   #119
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Default Re: An upside to the petrol price hike : Used car residuals CRASH

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Originally Posted by Fabiaous View Post
Forget the Laura and Jetta , its not easy to maintain a polo or Fabia which is more than 3 year old. Average maintainance is around 15K for a 3-4 year old single hand used Fabia/Polo.
Again OT, but I don't think its fair to predict the "average maintenance of a 3-4 year old" car as "15K/high" if you are aware of the fact that the so called 3-4 year old car was launched just 2 years back in India (Polo was launched in 2010 IIRC). How on earth did you get the number of 15K maintenance for that?

Whether you can compare the maintenance costs of a Polo to Fabia is debatable.
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Old 30th June 2012, 09:44   #120
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Default Re: An upside to the petrol price hike : Used car residuals CRASH

FM going to become the President leaving a mess or a bonanza behind (depending on your viewpoint) . Now is the time to pick up the petrol cars which have suddenly become more affordable.

The prospects of the leisure car market have become brighter - Read it as having a ball with souped-up Petrols. Leave the mundane Point A to B running to Diesels though must add that turbo diesels can perform quite well too but at a greater capital cost.

Hope you have enough parking space at home too.

Last edited by basky : 30th June 2012 at 09:48.
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