[jetsetgo08]

Could someone please suggest the right approach to scout for a used car?
Even in this mayhem, I still find the used cars in online ads to be grossly overpriced.

[invidious]

Does it not affect new cars? Surely, some dealers must be showing a "cash discount" on paper to save tax for themselves and the consumer - especially for cars with a high ticket price.

[SmartCat]

Originally Posted by jetsetgo08

Could someone please explain what is the right approach to scout for a used car?
Even in this mayhem, I still find the used cars in online ads to be grossly overpriced.

The fall in prices will not be instantaneous, like in a stock market. Its unlikely sellers are logging into OLX and slashing prices. Right now, there are two kinds of people -

1) Those hoarding their 100s
2) Those trying to get rid of their 500s and 1000s

Start looking for bargains in the used car market from Jan 1st 2017

[RavenAvi]

Delhi sees 70% dip in new vehicle registrations in the past 3 days, reports ET Auto.

“Since the registrations are done in cash, few people have been able to register their new vehicles due to the liquidity crunch,” said a senior official. On Thursday, the Delhi government asked RTOs to accept demand drafts from people who wanted to register their vehicles. However, given the huge rush at the banks, transport officials admitted that few people had come forward with demand drafts.

Sources said dealers, who also register vehicles in Delhi, had reported a similar drop in the number of registrations. “Some registrations are taking place but the number is minuscule. Registrations have almost stopped in the 13 RTOs in the city,” added the official.

[GTO]

Originally Posted by GTO

In the shorter term, I'd expect new car sales to go through a slowdown. November will be BADLY hit. Longer term, there are huge, huge gains as a lot of dirty money is re-entering the system. IMHO, new car sales will grow after an initial lull.

Another trigger for an increase in new car sales (after the initial lull) will be lower interest rates. Banks - which are going to be flush with more cash than they've ever been in history - will be desperate to put the money to work. Expect very good interest rates in 2017.

[harshunlimited]

Originally Posted by GTO

You can still sell it off, take cash, issue a full receipt and deposit that cash in the bank.

Just to clarify, make sure to issue the receipt dated 8th Nov or previous if you are accepting old notes, because, even though the deadline of deposit is 30th Dec, it is for the accumulated cash (cash in hand in your A/c books) till 8th Nov only.

The old notes ceased to be a legal tender from 9th Nov onwards, If you issue current dated receipt & accept old notes, you are doomed.

[riteshritesh]

Originally Posted by harshunlimited

If you issue current dated receipt & accept old notes, you are doomed.

There would also be TCS involved no? Any time limit for depositing TCS? That has to be considered while issuing a backdated receipt.

[harshunlimited]

Originally Posted by riteshritesh

There would also be TCS involved no? Any time limit for depositing TCS? That has to be considered while issuing a backdated receipt.

TCS is 1% on the Sale of Cars (both new & old) if Sale is above Rs.10 Lakhs.

The seller has to collect the same at the time of sale & it can be deposited online (irrespective of the mode of payment) by 7th of the following month. For Ex. all sale receipts with TCS in Nov 2016 has to be deposited to the dept. by 7th Dec.

[Sawyer]

Carrying over a similar conversation I am having on another thread, which might be relevant here.

What will happen if I sell my used luxury car today, and take the full payment in cash?
To me, nothing, except that I will have to explain this transaction/deposit in my bank account to Income tax if asked, and justify it by some documentation like name and PAN of the buyer - which is always a wise thing to obtain any time a vehicle is sold. Once the tax authorities are satisfied that the cash is for a transaction that is not liable to income tax in the first place, I will be left undisturbed.

Income tax will of course then have the information to pursue the buyer of the car, and ask him to explain the source of the cash. But that is his problem to deal with, a matter between the buyer and the IT department.

So, on the other side, buying a car for cash today, even if the seller is willing to accept old notes, will not address the problem of unaccounted cash of the buyer.

[cs_rajesh]

Sawyer, my 2 x OHD 500 notes + 2 cents:: selling a car for cash today should be ensured you don't take old high denomination notes because they are already banned and your transaction happens after banned period. Else You have got to have proof the exchange happened before November 8.

[Sawyer]

Drawing a general conclusion - and I am open to correction to the logics - the impact on car buying:
1. None on new cars. Dealers were obtaining PAN details in any case, and the information that the IT department needs to do their work was always available to it.
2. I doubt that too many hoarders of black money bought used cars - so I doubt there will be a major impact there as well.
Overall, little direct impact. There may be an indirect impact of hoarders feeling poor because of loss of wealth, and being psychologically affected into being careful with their spending, as one example.

Originally Posted by cs_rajesh

Sawyer, my 2 x OHD 500 notes + 2 cents:: selling a car for cash today should be ensured you don't take old high denomination notes because they are already banned and your transaction happens after banned period. Else You have got to have proof the exchange happened before November 8.

That is exactly the argument I am in on the other thread on the subject. High denominations are NOT banned, they are just not legal tender anymore. Which means that some one is now legally allowed to refuse to take them, but isn't stopped from voluntarily accepting these. Obviously he will only accept these if he can convince the IT department that these represent transactions on which tax has been paid, or is from a transaction that isn't taxable in the first place, as in the case of the sale of a private car. The date of sale is not germane to the issue.
PS: For more on this, see the recent posts on the other thread, if interested. I don't want to clutter the forum with the same matter in two places.

[Turbanator]

Once the tax authorities are satisfied that the cash is for a transaction that is not liable to income tax in the first place, I will be left undisturbed.

Technically, this is possible but it will definitely raise a Question when you deposit funds into your account. So keep your documents clean. Both parties should agree to keep agreement before 8th and on a safer side, you can mention delivery to be given on say 15th after with an excuse - like repair of some part in car at sellers expense or some auspicious reason

If your returns are of low value and you don't do any other naughty things, you can get away but if you want to generate cash showing sale of your car to someone or do such things regularly, this can create a problem for your other things as well.

[Sawyer]

Of course, this can create issues for "other things"! But not for anyone that is entirely honest in ALL his other things. Including on the date of the agreement and delivery. For an honest citizen, there is no need to be dishonest with these even for December 2016 transactions.

Yes there may be a letter from the IT, but I have found that if you given them a clear and complete reply, that is the end of the matter these days - if your past IT records prove your honesty.

[nettooran]

Had visited the Toyota showroom in Trivandrum yesterday to check out the new Fortuner on display. In a casual talk with one of the acquaintance who works there, he informed that there were 18 cancellation in the last two days. Definitely an effect of the demonetisation.

[serious_maniac]

Originally Posted by nettooran

Had visited the Toyota showroom in Trivandrum yesterday to check out the new Fortuner on display. In a casual talk with one of the acquaintance who works there, he informed that there were 18 cancellation in the last two days. Definitely an effect of the demonetisation.

I think there would be a general fear of taxman tracking you and thus people who would not have legitimate means of affording luxury cars will be backing off their purchases at least for time being.

Also there are people who buy cars under different names and later transfer to themselves. So all that activity is currently down. So this will have an impact at higher end of the market for sure till our ingenuity helps us find a solution - 3-6 months away.

~m