[ajmat]

I have been tracking this for quite some time (call it planning for the future!). Here are my theories on this! Disclaimer - my statements are hypothetical and am happy to prove myself wrong.

Some folks are old players - like Standard Cars, Citizen Cars, Classic Car's
Some are new players - Autobahn Car's, Cauvery Cars etc.

These folks advertise and have made some sort of name. They are well networked amongst each other and with businessmen and politicians. Next consider the interlinks with the more liquid part of the economy. Liquid cash.

I doubt any of these folks have inventory financed by traditional institutions, instead they are financed by businessmen. These folks will finance with a higher than normal interest rate, hence the high mark-ups on cars.

The other way, especially if charging interest is unpalatable is to get individuals to finance purchasing the car and splitting the profit.

In both cases, there is a need to keep margins high and avoid market fluctuations. Hence they all are in this together and help each other out in terms of access cross-selling inventory. None of these dealers offer any value beyond a clean car. Some of them do get the car checked before buying it for their inventory but beyond cosmetics, very little.

Most high end cars are leased by companies - at the end of the lease, there is a nice comfy relationship with the Lessor to either buy the cars at an attractive rate or sell on a commission basis. There would be plenty of arbitrage opportunities within.

Some high end cars are sold within the friends circle or given as part of a business deal. I know of a politician /land baron who offered a Range Rover Sport or a BMW 760Li as part of a settlement on repaying the deposit.

Sometimes, these dealers also lend money and cars, the cars come in as part of a loan settlement. Sometimes, the cars are permanently on sale but actually lent on a short-term basis. Rumour has it that the politicians fund these. These cars also get circulated amongst various regional film producers. I have seen a Jag XJL 5.0 asking Rs 39L when the similar car in Chennai is on sale for Rs 27 L

Now, lets talk about the wealth in smaller towns, these sweet folks with lots of money end up in the hands of a car dealer who will quote an inflated price. I sold a friends BMW 3GT to someone in Raichur via a dealer. Lets just say, I started at Rs 36L, then accurately gauged the market price as Rs 32L which I sold it for. To cut a long story short, I ended up talking to the buyer once the driver (my friend's) delivered the car, he was peeved that he must have paid Rs 3L more. If only he did his research, better still spoke to me. But he was firm to keep his commitment and pay the promised price.

The other thing is that people low ball in a stupid manner and dealers are fed up with it. Blue books/ Orange books are far from accurate. Hence they keep prices high although I wonder how they manage that high interest rate unless they churn other cars.

While on the topic of low-balling, crudely low balling assuming you are desperate does not cut it with private owners. One needs to negotiate with facts and politely. I bought a Mini Coper for a friend this year. The asking price was high but when it was made clear that I was genuine and will arrive at a sensible deal. The price became reasonable.

The other problem is the type of money. Nearly All high-end cars are ought on loan or lease. Owners do want to deal with high notes and not necessarily cash notes. Enter the smarmy dealer who will cut them a sweet deal at a cut price.

Like I said, this is all conjecture!!!!!

Everybody is in this business to make a profit but very few are really in it to ensure customer delight.

[GrammarNazi]

For the past few years I've been suspecting something on similar lines in the Bangalore used car market.

Many dealer's seem to have made an organised cartel of sorts, where the understanding seems to be to flood the Apps freely listing used car of seller/advertiser or the buyer (with authentication, but NO personal identification provided), with dealers adverts set at high prices. These other adverts would make individual sellers and buyers remain skeptical about the speculation around a reasonable price & thereby stay reluctant to sell.

Also, there surely are dealers who pretend to be individual buyers and quote a high price & promise to meet but eventually stage no-shows, wasting sellers time.

Apart from that, most individuals would have the financial stability to hold a car until it brings them their expected "reasonable price" compared to the other adverts. Individual sellers who find good street parking, consider standing cost of vehicle as just the annual service cost & negligible washer-man cost to keep car clean. Sellers forget to consider insurance, tyres getting bald spots and rubber-hoses going hard, belts, battery & other components etc too wouldn't work as optimally if vehicle is left idle for long periods.

I have seen people put up adverts from year 3 onwards & wait until year 5 hoping they get their price.

EoD, when individual car buyers and car sellers struggle with the price & sale process, they become weary of trying to sell, all while this process eats their time, energy & causes a negative vibe. Only to eventually sell it to a dealer.

A neighbour has accumulated 7 cars just because of this. Another neighbour has 3 old cars rotting away, for 2 people who actually need to only use 1 car.

P.S. : My take isn't based on a scientific analysis, but anecdotal study/understanding of the used car market.

[HTC]

Mafia or not, one thing is sure, most of them dont consider that "customer is the king".
Their behavior is such that they are doing favor to customer.
If we ask more details about history of service, owners car use pattern etc- they give random answers and get on a call and walk away.
They dont want to spend any time if they feel the customer is not ready to buy from the options they have.

And will give gyan as to which car suits our lifestyle , why you should not go for 4x4, what not.

There are very little enthusiastic and genuine used car dealers out there.

Even now there is a yeti marked at 5.75 lacs while same car ad was posted by owner at 4.20 lacs in olx. Now owners ad is removed.

For the fun of it, it has been a hobby sort of thing for me to search similar 4x4 cars pan India and compare prices in different states. From what i have learnt so far is that ' Bangalore used cars are expensive by 30 to 40 percent compared to maharastra or UP/MP'.

I havent given up hope yet. Will save money and buy from olx or qickr from direct owner for the price the vehicle as per its worth.

Meanwhile, my almost 10 year car is booked by couple of my friends and colleagues if i ever plan to sell

[Vid6639]

Used cars in other cities make a lot of sense but not so in Bangalore. The prices which the dealer cartel ensure is maintained is insane.

I remember someone who sold a BMW 520D to a buyer who he suspected was a dealer but was giving reasonable price. Less than a week later the same 520d was back on sale by a dealer for 8L more than what it was bought for!

Resale prices in Bangalore are completely skewed vs the rest of the country. Everywhere else the used car market makes tremendous sense but here in Bangalore a used car is difficult to find for a good deal.

It is very difficult to get a individual purchase for premium cars. Dealers lap up premium cars in a jiffy and turn them around at crazy prices.

Mumbai and Delhi have larger supply hence it is not easy to do that there.

[pannags]

We experienced this when my brother-in-law was looking to sell his decade old Swift Petrol, two years back.

He choose to go a popular reseller, after which same price was quoted at two other places. Apparently, the car is logged in the inventory and made known to connected dealers. Obviously, the price quoted was lower than expected.

We finally chose to go with the car dealership from where the new car was bought since that gave us peace of mind with transfer of ownership.

Frankly, I think it's better to sell direct or go for an exchange, but either way follow-up and ensure that ownership transfer is completed.

[viXit]

Websites and portals like olx and quickr need to step in if they really want the system to work. They need to either not allow used car dealers to fake being single owners or find a way to make sure they

By now it's obvious the monopoly the used car network has.
I don't own a car. So it's a pass time for me to go on used car websites and check out old civics, octavias and w221(dream car guys!!).

Something I've noticed is that the same car is advertised again and again without even changing the pictures, and it's always used car dealers..

I was having a converation with mom yesterday and she is very strongly against used car dealers, of the 6 cars we have owned over the last 2 decades, all of them were brand new.

My grandparents bought a used amaze for my aunt in a hurry and the car is a disaster.
This has ruined the idea of pre-owned cars for everyone, but I still believe that they're the best option for the sheer value that they provide us with.

The problem is further amplified in the luxury car segment.
-Initial owners are generally affluent and can spare money but not time
-Due to this they sell to dealers because they don't want to sit around waiting for someone to call with queries and low ballers.
-The number of lowballers is exceptionally high in luxury cars because of the desire of so many to own one.
-The so called mafia takes advantage of this and now the only way you can buy a pre owned beemer is through a dealer who has grossly overpriced his car.
-We can all do our part by just listing it on our classifieds and trusting that a good buyer will come along.

[Sebring]

I got played once, and learnt my lesson early on. This was right at the beginning when i wanted to learn driving, so I had fixed a tight budget of Rs. 80,000. I would learn driving and then dispose of the car, or at least that was the plan. Some cars were very old (1997 models) but the used-car dealers would quote an absurd Rs.1.25 Lakhs, and just wouldn't budge. And I faced this where ever I went. My oly demand was that the car be 'single-owner'. Now I found out that 'this cartel' is so well networked that once a customer walks in, his number is shared between them and the dealers know exactly what I need when I call them. There was one dealer in Koramangala Complex, and he calls me one day that a white Zen is available for Rs 1.10 Lakh - single owner. I went there and they had prepped a nice 'seller' for me. The guy was impeccably dressed, ArmaniX T'Shirt, Gucci glasses, Timberland shoes, the works. So they show me the car, and I checked everything. The door was a different shade, pointing to a repaint. But by now, I was tired of searching and that didn't seem a problem. As per the seller, the car was "corporate owned and maintained" and I was getting full details from him, when another 'buyer' comes in. (This was all such a beautifully orchestrated drama that later on whenever I played it back in my head, it put a silly smile on my face). Anyways, 'this buyer', who is the dealers own plant, wants this very same car and will pay a full Rs 1.10 Lakh. Now, I fear that I'll lose the car and moved up my budget to Rs 1 Lakh. All along they say the car is 'first owner' but never showed any documents. I insisted on documentation, and when that was not coming, I walked out. I was walking to the parking when they call me back. Now the RC book copy has magically appeared with a few pages missing. Right now it shows only the first owner page to me. I said "fine, but I can't offer over 1 Lakh". Now the other 'buyer' assumes the role of 'seller' and starts explaining why he bid so high. The engine, first owner car, accident free, music system, maintenance free...etc. All three put so much pressure on me that I buckled and agreed to the price. Just see how they eased me up the offer price. So I plonked down Rs.1.10 Lakh, and the very next minute he asks for Rs 6000 as RTO charges and 'bribe'. Says something vague like, 'the car is Koramangala RTO and mine is Yeshwanthpur'. Since I'd already given him the money I had to go along with his request. I drove away with the car but the guy took two weeks to deliver the original RC book (After my incessant follow up). Now I found out that I was the third owner for the car. It had met with a pretty bad accident, and was evident here n there. But I did learn driving, restored it partly, and traded it in (to a showroom) for a Hyundai. They gave me a lakh for it, and I came out wiser from the incident. This put me off 'used cars' for life! Few valuable lessons were picked up that day

[DualSwift]

I am from Bangalore and am not aware of any 'Mafia'. However, I had 2 swifts at home - both 2013 made, one Zxi (purchased by my Dad) and one Vxi (purchased by my wife before I met her). However, neither of them learnt any driving and we finally decided to sell off the Vxi this year. It would have completed 7 years on June 25 and had run only 13,900 km, single use (all by me). I didn't trust any of the OLX/Quikr ads and first went to Cars24 in March. After the inspection, they gave a quote of Rs 3.xx lakhs citing the car's age, even though the odo reading was very less. I felt it was not a worthy deal and decided that we are not going to sell it for anything less than Rs 4.2 to Rs 4.5 lakhs as we felt that it was a fair deal.

Finally on June 13 this year, I took the car to OLX cashmycar for a quote and after the inspection/bidding, they again gave me a quote of Rs 3.6 lakhs. I flatly told them that I'm not going to sell it for anything less than Rs 4.2 lakhs. They finally agreed for Rs 4.1 lakhs and the car was handed over to them on that day itself, with the full amount transferred to us before we left the showroom. Overall, I felt it was a good deal considering the car's age and when my relatives/friends inquired abut the deal, everyone felt that it was a very good amount.

[pradeepkc]

Dealing with certainly feels like I am dealing with a mafia. I have been looking for a luxury SUV on OLX and Cars24, and have told all my trusted friends, SA and FNGs to let me know if they know someone selling. I have been looking to buy from owners directly, but haven't come across one I like yet. I had bookmarked one I liked from a dealer for a month now. He clearly hasn't been able to sell it at the price he has quoted on the Ad. So I decided to check it out, I found out the car was serviced at a FNG I know. I talked to the FNG guy and he did tell me the car is in a great shape. He also called the owner and found out the owner sold the car at Cars24 and even mentioned the price. The dealer was selling it at a 30% premium! I offered a 10% premium over the price the dealer bought it at. He flatly told me he's not interested. My search is still on :(

[Aravindpn]

Hi,

This experience was around 8 years back while hunting for a used Toyota Corolla in BLR. Saw a white one at a dealer (forgot the name-this dealer was located at left hand side of main road while going from Mekhri circle to Yeswantpur before right to Mathikere- lots of SUV's are normally parked there), liked it, decided to finalise the car and paid 15k as token agreeing to take the car after 3 days. The mileage of the car was 50k odd IIRC. The day before delivery, called Nandi to book appointment with a plan to take car directly for service. The person who took the call after checking regn no told that last service was done at 90k around 8 months back. Felt disappointed and called the dealer to cancel the deal and also dejected thinking that there goes my 15k. However, to my surprise the dealer was very professional and returned my money after deducting some 2k+. I had referred this dealer to many user car buyer later as this approach was unheard of. So the point is all dealers are not same, some good one (although less) are there, depends on time you have in hand and bit of luck.

Regarding the buy, after 1-2 weeks of hunt bought my present corolla from a direct buyer. My experience teaches me to have some time in hand for the hunt and always buy from direct owner. Also have some reserve money to do service and repairs as necessary. You will definitely get some good deals buried under many of so called 'featured' ads.

PS: My experience is limited upto C segment.

[karan0009]

My friend recently sold his 3 years old Hexa XTA with 50k on the odo for 7 lakhs in a Tier 2 city. He wanted to sell his car on urgent basis and after hopping around with multiple used car dealers this was the best quote he received.

I wish he could have told me about this deal before letting it go for such a low price

[Arjun Bharadwaj]

Have seen some unfair practice even by so called "transparent" evaluators such as Cars24. I've personally witnessed a situation where we went there for a car valuation and they quoted a value. When we visited again after a few days because we weren't able to sell it elsewhere, they quoted almost 30% lower than the initial quote - does a car depreciate 30% over a few days? or is it the fact that the customer was probably not able to sell his car anywhere for a price better than the initial quote that they take advantage and quote a lower price? I still don't have an answer.

I have now reached a point where its highly unlikely for me to buy a used car in Bangalore. I would rather buy it from some other state for better value.

[Sayan]

If one intends to avoid said cartel,
What are the pros and cons of buying a used car at ones hometown, from trusted sellers/dealers/where the cartel is perhaps not so strong and get it re-registered in Bangalore?

Some of the margins mentioned seem so high they're are similar in value to the road tax.

[InControl]

I was on the hunt for a 4th gen city CVT VX in Bangalore.

Followed up on cars listed on OLX and despite them being marked as Personal used to be all in possession of dealers. Saw 5-6 cars over a period of one year and either the cars were not in good shape/red flags like stepney area repainted, paint spray in the engine area or the price quoted used to be very high(8.5 lakh for a 60k done 2015 model). At Classic automobiles 2015 VX model, 30k run was for 9.5 lakhs. When i told them my budget was upto 7 lakhs they just shrugged and said you are looking at the wrong segment. Auto + Honda Brand + Honda City + Bangalore Traffic + Bangalore taxes all contribute to this mark up.

January this year saw an Ad on OLX and the dealer was 20 kms from my place. Drove down to check out the 2014 honda city SV CVT and liked the condition. The interiors were in very good condition and car drove well considering the 52k kms on ODO and condition of the tyres. Took it to the Honda Service centre for a checkup(they charge ~900 for it), the car was serviced on time at Magnum Honda all through, The insurance was at 50% NCB(the front bumper was clearly repainted and there was a small chip on the windhsield). After getting a thumbs up and reviewing the entire service history at the ASS, came back and gave a counter quote of 5.5 for an asking amount of 6.2. Shook hands at 5.6 + 2% brokerage+2500 RC transfer charges. Compromised on the VX features by going with SV.


While renewing the insurance, found the owner's number on the previous year's copy and called him. He was quite helpful and per him he had sold the car for 5 lakh to Cars24 in Nov 2019. So Cars24 and the broker together made a cool 75k off me. The car is alright(Changed tyre+alloys for 50k, battery for 2800 due to the pro rata return costs, music system for 12k, windshield at windshield experts by claiming insurance for 2k and Service for 12k) so i guess a 60k lesser amount would have been ideal which was near about the margin

[ash22]

This is the scam which me and my friend undergone in a used car dealer in chennai-south in the year 2016.

Car - 2011 Swift Vxi 75,000 kms ODO
Reason for sale - Running is huge and feidn prefers a diesel car
Dealer - Reputed dealer in Velachery-Adambakkam-Chennai

1. We visited the dealer at 10:00 AM with all service records and car papers.
2. Dealer inspected the car (took complete pictures) and quoted 1.8 Lakhs
3. We were expecting above 2.5 lakhs.We found the the dealer's price to be low and we returned.
4. Dealer said, He will share the car pic to customers and if we get a deal through him, He needs 2% commision. We agreed and returned.
5. Days passed, We visited to another dealer by next week and he quoted the same price and said he already saw the pics of the car through a OLX ad. (Surprise)
6. We contacted the 1st dealer and asked him to remove the ad since we never allowed him to post an ad in OLX. He agreed after an argument. The price he posted in OLX was 3.5 lakhs for the same car.
7. After couple of weeks, The dealer called us and stated that he got a buyer for 2.3 lakhs and ready with cash.
8. We went there with the car and there was a buyer(claimed) that he is going to purchase the car. He sounded odd and his behaviour was more like a experiensed dealer and not a owner.Somehow i was not convinced to sell the car to him and we planned to return.
9. Here comes the surprise, The dealer wants us to pay 2% commision since we are not ready to sell the car to the buyer(later found he is also a salesman in the same dealership) and not an actual buyer.
10. Heated arguments on both sides and here is another surprise, the showroom has more female attendents who shows the car to the buyers and initiate the initial talks of negotiations.
11. Those womens also joined us in the argument and later claimed that me and my friend misbehaved with those womens and need 5,000 Rs as a compensaion.
12. We asked for the CCTV footage and we were ready to go to police and do legally. They avoided and we left the dealer.
13. The whole eposide was seen by an actual buyer(who is looking for a car with in 3 lakhs budget).
14. When we were about to leave, The actual buyer called us and asked for the car details and he said, If he is ok with the car, he can proceed with the deal.
15. The buyer & Mechanic testdrive the car and was super happy with the car. The sale happened outside the same dealership without any hassle, commisions etc.

- If you are planning to sell your car through online platform, Better Fix a place which is near to a police station. I sold 2 of my bikes and a car in online platform.
- I share pic to the buyer and for the first meeting, I always prefer to meet infront of a police station in my area. I somehow feel secured meeting strangers in a secured environment like police station or any goverment building and not in our home/office.