[07CR]

I had recently started contemplating on buying a Pre Owned D segment car (Hector/XUV500/Elantra) by early 2022. My considerations while buying the car are-

1. It should be a D segment car, however might consider the Seltos GT line.
2. My budget is Rs.10-12 lakhs.
3. Will be buying the car primarily for highway usage, with a yearly running between 3.5K-5K.
4. Age should be between 2-4 years.

However, considering the impact of Covid-19 on the Indian economy, I see two outcomes on the Used Car market-

• Huge discounts on many used cars due to the impending recession/depression caused by the Pandemic.
  
• The pandemic has a negative impact for the used car buyer as the owners of the D segment cars might reconsider selling them.

Please input your views about how the pandemic might impact my purchase and the used car market in general.

[Narendranath]

Yes, the Corona scare would surely beat the blues out of the market in general and the car market in particular.A nasty recession is sure to set in and the first casualty would be discretionary spending.While new car sales would take a severe hit,the used car market should be relatively better placed.In that sense one may not get to see too huge discounts in the used car market

[Shreyans_Jain]

On the contrary, I expect the used car market to boom like never before in the coming months. A section of users of public transport will consider getting an economical small car for safety and social distancing reasons. Small businessmen and have all been squeezed pretty badly. They will also consider buying used instead of brand new given tighter finances and ever increasing new car prices. Ditto for MNC employees. Many who have usually steered clear of buying used for whatever personal reasons will also have to rethink; their wallets will now compel them to look into the pre loved market. You shouldn’t expect used car prices to tank in the near future.

[akshaymahajan]

I expect the hatchbacks and entry level sedans to hold decent value considering people moving from public transport to cars for a while at least. A few may go back to public transport in a few months because of either the traffic, the headache, the expenses or this fear just naturally living its course. There should be an increase in number of cars up for grabs then.

D Segment cars I think will drop value - people may need to sell it off because its not necessary any longer or due to financial reasons.

In the tech world, if WFH becomes more widespread (say between couples, 1 of them is always home), the spare car may help in increase in used car supply though.

And what happens to the cars owned by Uber drivers (or other taxi operators, hotels, etc) in case usage falls is a different ballgame altogether. Those will probably sit with banks for a while.

At the end of it, it all depends on how long this continues IMO.

[lamborghini]

Interestingly there is a thread here about how Kotak expects car purchase to rise due to covid as people want to maintain distance.
If this is true, I expect the pre-owned market to see its fair share of sales - maybe even more as people may not want to spend much as there is a lot of uncertainty and liquidity is key until we emerge fully from this scenario.

Similarly, I expect people to hold on to their luxury rides for a bit longer as big ticket items may not be in vogue + most of the prospective buyers would have already bought during the BS4 flash sale, and many who were waiting for BS6 may just push their decision by a few months.

Realistically, I expect this to normalize by next year but it will have to be supported by the economy.

[tristis2008]

Many commuters who were using public transport or ride shares of uber, ola or quick ride could start using their two wheelers; some might replace their old two wheelers with more comfortable bikes. I doubt if the used car market would see any significant jump, if those are the people who could be considered as natural customers to used cars. Given the fear of economic impact post covid, I don't think people would rush to buy second hand cars.Those who have deep pockets could still go ahead and buy their luxury cars. Only those who were actually buying their aspirational luxury car, either by taking a loan or by stretching their budgets will most likely postpone.

[confused.geek]

I would have to agree that the 2nd car in the family might get disposed in some cases, owing to WFH and financial thought. Given the slump in automotive sales and the expected pressure on the economy after we pull out of this COVID19 situation, it'll depend on Union Government legislation on taxes for the automotive industry. While I don't have data to backup the claim, the talk has been that some car manufacturers are considering pulling out (prior to COVID19) due to low market share and profit.


I've heard of Datsun, Ford, Fiat (Including Jeep) all being reported as considering a pull back similar to what Chevrolet did. So, these cars might land on the market, but the pricing might not drop, as the used car dealers also push to gain profits. Perhaps a year down the line as prices drop and number of cars unsold remains, it might drop low.

[Heart_Revs]

Used car market car be divide into two parts.
1. Ordinary run of the mill commuter cars
2. Indulgence - mainly germans and other costly car.

First type will grow as people are likely to prefer any 4 wheeler- be it alto, nano , or any other similar safety.
Regarding case 2, it is mostly a matter of want not need. This segment is likely to shrink.

Expect lots of buzz lower down the pyramid and poor sentiments as one move higher the price segment.

[hiren.mistry]

Like most have already mentioned, I expect economy cars like hatchbacks, sub 4 meter sedans and sub 4 meter pseudo SUV's to have a good demand. To a certain extent cars such as Honda City, Maruti Ciaz and Hyundai Verna will also be able to find new homes.

However, the segment above will take a beating. For me, I've got a pre-owned 2013 Toyota Corolla VL-AT in January for a good price, hence I am out of the market. But I will need a new commuter motorcycle, so will keep my eyes peeled once this lockdown is over.

[pgsagar]

My take on this is, budget-end hatchback cars will see spurt in sales. Anyone who has been using public transport or a 2-wheeler so far would go for one, budget permitting. Then, cars above 40 L like Endeavour/Fortuner will hardly be affected because the clientele for these cars generally have way too deep pockets to be affected by covid-19 shutdown. It is the 15 to 25 lakh car market which may be the worst-hit. All the new-rage SUVs like Seltos, Creta, Harrier, Hector, Compass fall under this category. These cars are not generally the first car purchases and anyone planning to upgrade to these from their hatchbacks/sedans would just hang on to his/her current ride.

[jetsetgo08]

Cars below 4-5L would see only a temporary spurt in sale. Anything beyond will eventually become a laggard for the car dealer, whether new or used. For those, who had saved up exclusively for the dream used car in the >10L segment, it may be just about the right time.

[Tulok]

Originally Posted by jetsetgo08

For those, who had saved up exclusively for the dream used car in the >10L segment, it may be just about the right time.

Sounds great if things go that way. I'm pretty sure first generation fortuner will also come under that category.
Indeed it'll be a good time for people like me who's on the hunt for pre owned cars.
Thanks for the hope during this trying times

[Equus]

If people cant afford to keep their cars, they will dump them in the used car market. If demand is higher than supply, you know what happens. On the contrary, D segment car owners are better of (relatively) and might hold on. You never know!!
Interesting times!

[GTO]

Covid-19 has delivered a devastating blow to the economy, liquidity, household savings & consumer sentiment. Used car prices will crash as there will be very less demand. I agree with Akshay though - just the entry level hatchbacks & sedans might retain most of their value. But the expensive / big car values will tank like never before.

Originally Posted by lamborghini

Interestingly there is a thread here about how Kotak expects car purchase to rise due to covid as people want to maintain distance.

I think that was more of a "usage" rising (from existing car & bike owners) rather than "ownership" rising (from new owners).

[kiranton]

I have a feeling that hatch back market is going to bounce back, both used and new. People will be skeptical to use train and buses. Those who have two wheelers might upgrade to a used hatch to do the journey. Those who already have 4-6 year old cars might buy new car because of increase in usage.