An upside to the petrol price hike : Used car residuals CRASH

[GTO]

They say every cloud has a silver lining. Well, that's certainly the case for those in the market buying a used petrol car. After this development, prices of used petrol cars - across ALL SEGMENTS - have tanked. Another contributing factor is the massive discounting on new petrol cars from manufacturers & dealers.

While cheaper models have seen adjustments of 10 - 15%, there are plentiful cars that have lost 20 - 25% of their value overnight. 2006 - 2008 Alto, Spark & Santro prices are now about 30,000 (even 40,000 in some cases) lower than the levels of April 2012, while that for the petrol Swift is 40,000 - 50,000. Late model Getz' & Aveos are yours for throwaway prices. Well-maintained 2008 i10s are changing hands for under 2 lakhs (that's less money than a new Nano!). Spend 50K more and you can get yourself a petrol Verna of the same vintage ('08 Hyundai Verna = Rs. 2.5 lakh). Amazing Optras for a mere 1 - 1.5 lakh rupees & pristine Cedias for Rs. 2.5 - 3.0 lakhs gather dust in dealer lots. I've seen good Civics for 4 lakhs, Altis for 5.25 and 2007 - 2008 Accords trading at a mere 5.5 - 6.5 lakh in Mumbai. Live to drive? How about a 3 year old Laura 1.8 TSI for less money than a new Hyundai i20 Asta? Fatter wallet? For between 10 - 18 lakhs, you have the widest choice of C Class, E-Class and 3 series (325i 6-cylinder for 12 lakhs). A low mileage E60 BMW 525i for 17 lakhs makes my mouth water.

It's an absolute buyer's market out there. Thus, if your running isn't much and / or you prefer petrol, there's never been a better time to go out shopping. Even after the price drop, there are few takers for used petrol cars, especially models from the D1 (Altis, Civic, Laura) and D2 segments (Superb, Accord, Teana etc.). Bargain hard.

Suggested Reads:

Article 1 (ARTICLE: How to buy a *USED* Car in India)

Article 2 (ARTICLE: Buying a New Car vs Used Car)

Article 3 (ARTICLE: The Beauty of Lateral Upgrades (Getting MORE CAR for LESS $$$))

[GTO]

Thread moved from the Assembly Line (The "Assembly Line" Forum section) to the Indian Car Scene

[carwatcher]

Just posted this one hour prior to this thread.
http://www.team-bhp.com/forum/indian...ml#post2812194
I believe this can be correlated to Herd mentality at its best.
To make matters worse I have a Ford Fusion + which I am looking to sell since past 2-3 months without success.
I have seen personally a Corolla at Rs.3.5 Lac lying since last 3-4 months with absolutely no buyers.
I feel the Fiat customers will be the ones that are badly affected.
IMHO it makes sense to buy a used Petrol car at dirt cheap price and run it on Gas kit. Killer combination.

PS : Requesting to start a new thread on "Is it worth buying a New car considering the horrible experience meted out at Dealership of almost all the manufacturers"

[Blue Thunder]

So true, especially considering petrol AT cars...I have seen some well-maintained Corollas and Corolla Altis going at mouth-watering prices.

[iceman7]

This is exactly what I was discussing with a friend yesterday. But from the other side of the fence though. My friend has a 2010 SX4 with very low mileage on the ODO. He is devastated looking at the resale prices being offered. That too for a Maruti. I cannot imagine what value's the European Petrols will fetch.

On the flip side, a superb time for anyone looking for a steal. 3.0 lakhs for a Cedia did I hear

[selfdrive]

A buyers market indeed for petrolheads. Though I do wonder what will happen when there is any decision on the diesel tax or increase in diesel prices. There are already discounts being floated on diesel cars too and SAs are pushing prospects for confirming sales.

A colleague's booking for a Swift diesel has been cut from months into days, regardless of the non silver/ white colour. So has the booking list been manipulated all this while?

Also, it would be interesting to see if the resale prices tank a bit further if there is low buyers demand and if global crude prices start rising, pushing up petrol prices towards the 100 rupee mark.

For now, my wallet stays in my pocket. I already have two petrols! Though I might consider exchanging one at some time

[iTNerd]

When I was hunting for a used GV (just before the Rs. 7.50 petrol hike) and stumbled upon a very well maintained, just 33K Kms done, 2008 GV. And the asking price was 8.5 L. I offered him 7 lacs, but the owner didn't accept it, saying he expected at least 8. Now after a week after the petrol hike, I got a call from the broker, that the owner is ready to offer at 7L. But by that time, I had already decided to go for a diesel car because of insistence from my friends and relatives on not to own 2 petrol cars. I must say, the owner, especially for a petrol SUV, and which is also a market dud, would have a very hard time disposing the vehicle.

[GTO]

Originally Posted by iceman7

But from the other side of the fence though. My friend has a 2010 SX4 with very low mileage on the ODO. He is devastated looking at the resale prices being offered.

This is an incredibly bad time to be selling petrol cars. Ideally, your friend would use the SX4 for another couple of years.

Originally Posted by selfdrive

Though I do wonder what will happen when there is any decision on the diesel tax or increase in diesel prices.

Historically, once the prices of petrol cars have fallen, they never ever recover.

There are already discounts being floated on diesel cars too and SAs are pushing prospects for confirming sales.

That's because of inventories piling up at the manufacturer & dealer ends. Maruti is sitting on nearly 100,000 unsold cars, Tata over 40,000 etc. No one is buying in today's market.

[F50]

Originally Posted by selfdrive

A colleague's booking for a Swift diesel has been cut from months into days, regardless of the non silver/ white colour. So has the booking list been manipulated all this while?

The reason for this is slowdown in diesel car sales. End of May saw 1.07 lakh units of unsold diesel and 1.93 lakh of unsold petrol cars. The feared slam of taxes for owning a diesel car and hair-growing speed at which prices of petrol rise has left auto industry to submit these figures to Finance Ministry.

Tata leads the unsold inventory list followed by Mahindra & Mahindra and M.Suzuki. Check the Indian Car Sales and Analysis Thread for May 2012. May grew at a dismal rate.

This may be good news for used car market but the future of Indian Auto Industry is bad.

[selfdrive]

Originally Posted by F50

Tata leads the unsold inventory list followed by Mahindra & Mahindra and M.Suzuki. Check the Indian Car Sales and Analysis Thread for May 2012. May grew at a dismal rate.

Well, there are only so many cars that can be added to our roads.
Makes me wonder how car sales would be affected when (if?) mass transit infrastructure is built in our cities.

I hope the daily usage pattern changes at least.

I think the manufacturers in the Indian auto industry also need to face the fact that while their slice of cake is now reduced due to competition, the size of the overall cake itself may stagnate and even reduce on an ongoing basis due to fuel and other factors.

After all, our used cars (or bikes for that matter) dont go to the scrapyard so soon. They keep getting passed down the value chain till they are eitehr unusable or downright unaffordable to maintain.

[StarrySky]

Is this a Mumbai-only phenomenon? I mean, this crash in prices. Although it's quite possible that petrol cars have lost a few 1000s in resale value due to the recent hikes, I don't think the drop in value is very steep here in Cochin. My father has been offered Rs.1.95L for his 2006 Wagon-R - that too by the Maruti dealership in exchange for a new car. I'm sure an individual buyer would pay 5-10K extra. I think that's still a good price.

[zulfi hansi]

This could well be a short lived one, it will be even worse I mean to say, considering the diesel subsidy tax hanging over the market, it could fall anytime, if that happens the market sentiment will be zero sales new or old. The extra Tax may not be as much as the FM has suggested but could well be at least 60% of that, in such conditions even new diesel car sales will slow down, the only flip side is that used diesel cars will gain considerable value over night. And have no clue what will happen to our beloved petrol cars in the D1 & D2 segments, to say the least I am one of the sufferers.

[Abhi_abarth]

Originally Posted by iceman7

On the flip side, a superb time for anyone looking for a steal. 3.0 lakhs for a Cedia did I hear

Did I read it right ?? Cedias between 2.5 to 3 lakh !!! I have already started my hunt for a good Cedia and this cannot be a better time for it. For me a Cedia makes lot of sense as my monthly usage will be < 500 kms and driving pleasure takes first seat. What else would one want ? driving pleasure with sheer value for money.

If it wasn't the hike, a petrol head like me would have ended up buying an alto k10 or a beat D thus supressing my desire of owing a Mitsubishi Cedia

Cheers,
Abhi

[Vishal.R]

I was also thinking on the same line.
Consider if somebody is planning to buy a car, there are 2 options,
Loaded diesel hatch/sedan(entry level) for 6-8 lac.
Pre owned petrol sedan for 4-6 lac.
In second option, almost 2 lac is saved and one can get a better car to drive.
Also, according to me, compromise on peace of mind is not much. e.g. what is more reliable in long term? a new hatch or 20k km driven and properly maintained Honda.

[Speed-Freak]

I remember about a year and a half back, i had people coming and asking me to sell my 2000 model Old Honda City 1.5exi, my asking price was then 3L and i got offers of 2.75L when i dint budge. Now i have been trying to sell my ride for 1.75L and i do not have buyers for it.

I also happened to find a E250 CDI-2008 model which had done 55k kms for a little above 13L without any negotiations.

The market is flooded with great deals and as GTO pointed out the Germans are way too tempting to resist.