[nerd1200]

Originally Posted by GTO

What exactly is Bangalore's used car mafia? What is the modus operandi? How are customers disadvantaged? How exactly do they "control" the market?
Thanks!

Based on my experience:

What is used car mafia?

(Speculation) Well essentially most used car dealers are by some factor "in-sync" on buying and selling prices of particular car models. Ofcourse they offer similar "low" prices when buying a car from private owners and sell it at similar "higher" prices.


Modus operandi - not clearly known

How are customers disadvantaged? How exactly do they "control" the market?

1. Inflating used car prices - A private owner sells his 2015 Octavia TSI Elegance/Style Plus at 11 Lacs. Dealers have quotes of around 17 Lacs. Essentially driving the price substantially up for that model. If another dealer offers me a similar (in some cases, same car - they pool resources to buy a car sometimes) at 16 Lacs, I buy it assuming I got a "good deal".
Just compare the prices of any popular car model in Bangalore Vs. Mumbai/Pune/delhi/Kolkata/Hyderabad and you'll know what I'm saying.

2. Pushing owners to sell at lower prices - My friend tried selling his Swift ZXI - 2014 MY. His expectation was about 4 Lacs. He kept on getting calls from dealers offering him 2-3 Lacs
"Saar, Market is down na.. No one will pay this much)
When he continually refused, few dealer guys posed as private buyers and did the same (how do we know? Truecaller. ) in a hope that my friend realizes his quoted price is higher and sells it at a cheaper rate.

3. Overcharge for "papers-transfers" - KA RTO fees for title transfer is about Rs. 500? I had to pay close to Rs. 5.5k last time I was doing it. We initially agreed for 3.5k. After 3 weeks and dead silence, he calls back saying "Rates have increased". On requesting the documents back, he was like - "Sir, it's already with the RTO, we cannot return now". So essentially I have no other option but to pay up since he has the original RC card.

[Shanky_1002]

Absolutely agree with comments, the used car cartel works in perfect sync, once a car comes in their network, a certain low price is quoted which is almost the same no matter which used car dealer or portal once connects with. This along with the usual crap that this model is not in demand now, if it was diesel it might have fetched better value, if it was an SUV I would have got you plenty of customers lined, this is the best price you can get in the market and the likes so that a seller is convinced that his/her call is really valued at what these dealers are offering and he/she would ultimately sell at that low quoted price.

Inbox spamming from individuals who are just doing time pass and not really looking to buy also helps such dealers where the seller would get immediate settlement at a lower price but wouldn't have to take any headache of interacting with multiple prospective buyers. However things turn around the other way when a buyer is looking for a car, then that very model turns into a hot cake which sells itself and hence commands a premium. Even Olx cash my car and Cars 24 are part of the cartel and work in providing information on newly available used cars to the network, since these are considered as trusted bodies when compared to individual dealers. Sharing a personal experience recently, I wanted to sell my Corolla Altis since I was not using it due to pandemic.

I approached Olx cash my car and booked a home inspection, the evaluator came and took all pics/details and seemed very positive on the car condition and that the expected price is genuine and I would easily find a buyer, he promised a call back from his team with a quote, however the quote was really a joke, anyways I declined and thought of calling Cars24, same story this time as well with the quote matching to the exact rupee. Again I declined and moved on, now every other day their representatives would call and ask is it still available? Sometimes they would say we have a interested buyer but absolute low ball every time.

Twice the representative agreed on the price and promised that I'll get a call back to pick up the car and start the transfer process but no one called and again a new representative called starting the whole story from scratch . I said I don't know what you guys are up to with your numerous calls with false promises but I know my car and what it should be worth, if I have to sell at the bottom low what you're quoting I would rather enjoy it for another good 4-5 years before selling . In case any fellow BHPians might be interested, here's the link https://classifieds.team-bhp.com/buy.../Corolla.html/

[octane1002]

Originally Posted by vigsom

Corporates, company executives, businessmen prefer to sell their cars to/through reputed dealers so that the dirty work of finding the right owner rests with them. For this "service" they earn good margins.

I was never pro used car dealer in my early enthusiast years. I also now realise all my pre worshipped buys have been 'good' cars which came from the dealer (for an obvious margin) because these never came to the open market.
I used to hate the dealers for charging their margins and wondered why the owners didn't bother selling on the open market.


Somewhere along the way I had to sell a couple of cars to make way for new purchases and chose to advertise direct in keeping with my belief for a win-win for both me (seller gets higher price) and the buyer (he gets a direct deal and a lower price due to zero markup by a middle man).

Will focus on my recent Superb V6 sale (sold last month to an enthusiast) which made me realise the amount of hassle an individual seller has to go through screening from a pool of morons/seemingly serious 'enthusiasts' who talk from their backside and are only in the picture to make a cheap deal (their philosophy is to crack a too good to be true deal at the expense of the seller, car quality be damned!Heck these people don't even know what car they want, they give offers for everything from a Nano to a Meecedes) till the seller reaches a serious buyer who puts his money where his mouth is.

No I am not even referring to the olx/cartrade type low-ballers ('apka final kya hai? Main apko x lacs cash me kar dunga' where say one's advertising price is 2x). My priority has always been to deal only with a Bhpian/enthusiast in the hopes of finding a good home for my car. Not a flipper/dealer. My previous Octavia RS was also sold to a Bhpian from Bhopal.

And here it is that I came in touch with a Bhpian (amongst others) who claimed to be a Skodafan (his handle on the forum is something very similar and I would not like to name him). The guy took all information out on the car from me, to the extent of my sharing screenshots of my E-RC which has chassis number, most recent tyre purchase bills in addition to me allaying all his doubts on the car where he categorically told me he was coming to pick the car up the next day if I agreed to x price. I did agree as I wasn't in the deal to make money but was rather happy to be able to find a home for my car.

At the same I had been reached out to by another guy from nearby my neighborhood who had known my car through a common friend. I put on hold the deal with him as this Bhpian was so interested in picking my car up to the point of assuring me on a whatsapp text at 12 am or so that he knows this was his car and that he would pick this up the morning after making payment on the spot. Morning comes and this guy drops in, makes checks on the minutest things like the headliner, dashboard alignment, has a drive, chats up on maintenance etc. After the drive he casually steps out and says that his father was to send him money but he does not know whether he is sending the money now and can't commit on the deal. Not a word during the drive, or prior to the drive.

I did not know what to say and was at a loss of words but the topping on the whole story was the way this guy went on dropping references of Zac Hollis, how he is in touch with the Skoda India head and how he 'would have' picked up the car but doesn't have the budget. Apart from wasting my morning, the other potential buyer too started playing on the fact that I could not make a sale elsewhere and therefore revised his quote(fair enough, I had put him on hold and was honest about it). I did eventually manage to find a buyer the next week and that buyer was someone who did not even come to see the car before finalising (exact opposite of my experience with the Bhpian) but all I am saying is that in a pool of 20 there is maybe one genuine buyer. The other 19 are time passers /low ballers. The reason I highlight the experience with the BHPian was that when one experiences such a transaction with a Bhpian, what expectation does one have from the olx crowd? The guy shamelessly keeps rehashing his stories to me even now asking me for advice on everything from used Yetis to supercharged Audi A6s (This when he did not have the budget to buy a Superb) , the crux of the matter is that I soon realised he was never in the fray to buy a car, it was to crack/lowball into a good deal. That's what 90% of the market is at, all talkers.

Any surprise then that people sell their car to dealers (the dealers bargain yes, but there are some that put their money on the table and bargain)?What the dealer charges is essentially a first mover premium for putting cash on table where all the others are 'deliberating/getting back to you' etc. Yes the premium is high sometimes and I do not support that but it is a reward to the dealer for risking their capital/holding inventory and most importantly discharging the seller's monetary dues. What is fair and what is not is matter of debate but I am just saying end of the day we give dealers far less credit than is due for 'making the market'. In today's times especially (post COVID) where money to close a car deal is hard to come by, the dealer margin also factors in the dealer's cost of capital which may /may not be recovered in a long time (time till the car gets sold).

Last but not the least,while exceptions of dealer stubbornness are there, a good dealer will always give merit to a serious buyer and will close the deal at a negotiated price which is fair to him once he sees cash on the table. It is a matter of going all out to close the deal from the buyer's end as well rather than phonecall/sms window shopping. Sitting accross the table with chequebook in hand works more often than not unless the differential is too wide to bridge.

[MCR]

I think the used car dealers operate just like a "mafia" would. As of now they don't threaten one to sell (which Lad "mafia" does).
As mentioned by many others, CARS24 are nothing but a Corporate used car dealer. They have a very shady auction system. Their evaluators are mostly arrogant and work hand in glove with used car dealers.
The same is true with MySpinny. They however, procure the car themselves and sell it at a higher Price.

Originally Posted by Shanky_1002

I declined and thought of calling Cars24, same story this time as well with the quote matching to the exact rupee. Again I declined and moved on, now every other day their representatives would call and ask is it still available? Sometimes they would say we have a interested buyer but absolute low ball every time. Twice the representative agreed on the price and promised that I'll get a call back to pick up the car and start the transfer process but no one called and again a new representative called starting the whole story from scratch

I had a similar experience with CARS24 recently when I tried to sell my New Gen Verna. Got a hilarious quote and rejected it right away. They listed the car on their site and I would get calls with no real offers. Some agents even suggested that I should sell it for a lower amount. I eventually got tired and decided to delete the listing from their website.

I had posted an ad on TBHP Classifieds as well, but again got offers which were silly at the best. One person asked me to sell it at a low price since he wanted to take the car to Mumbai and re-register.

For now, I have decided to hold on to the car.

[Zamir]

I was in a similar situation two times in the past and would like to share my experience.

I was trying to sell our 2008 Swift LDI having 75k KM on ODO in 2016 (used for 8 years). I was looking to buy a new Ertiga Petrol. The quote from Maruti for the exchange was very low. I was expecting about 2.5 L but I was quoted 1.6 L. I walked out and told that I will try to sell in the open market when I get my price. He told me to book Ertiga now and pay for it when Swift is sold. I was firm that only after I sell my previous car, I would book the new car. After a couple of days, he called up and offered me 1.8 L. I didn’t accept it. Few days, they offered me 2 L provided I buy Ertiga Diesel. I said I want to buy Petrol and cannot change my requirement only for 20K more on resale. Frustrated with all these, I drop the idea of buying and selling for some time. After a few weeks, I posted an ad on OLX and found a direct buyer. He came, took a test drive, liked the car and paid 5k token. Two days later, he transferred the remaining money online and took the car. The deal was closed at 2.15 L which I think was a fair price for a low-end variant used for 8 years.

In 2019, I wanted to go for automatic due to Mumbai traffic. My Ertiga was 3 years old, 35k KM on ODO, and in very good condition. Tried my luck Honda showroom (was considering BRV Automatic) and was offered 4.9 L. Went to few local dealers and was offered in the same range. Went to OLX showroom and they quoted 5.4 L. I said I was expecting 6.5 L. They called back after few days and offered 5.75 L. I said nothing below 6.25 L would be accepted. A couple of months passed by and I thought 6.5 is too high expectation and posted an ad on OLX app with a quoted price of 6.25 L. After few days, a guy came, took a test drive, paid 5k token and closed the deal at 6 L.

So as most of them have said, I agree with them. When buying or selling a used car, you need to have time and interest in this activity. You must be really patient to get a good deal if you want a better price.

So, if you cannot wait then you will have to sell it at a price you “GET”
BUT if you can wait, you will be able to sell it at a price you “WANT”

Know your car’s true market value. Look for direct buyers and be flexible in pricing.

[girishv]

This may not be limited ONLY to used car dealers, but for new cars and bikes too.

My brother-in-law wanted to buy Eeco and we visited MASS showroom on Mysore road, Bengaluru over weekend to enquire about it. The SA was very eager and he even stole us from another SA who was supposed to get our enquiry (heard that walk-ins are usually allotted to lady SA). Since it was end of the month we initially let it go and started the negotiation. He was very eager to close the deal then and there itself and offered a mouth watering deal while promising no penalty if we cancel the booking later.

He almost finished the paper work and while going through it we found that "Cancellation charges 2500" stamped multiple places. While seeing the papers, the original SA who was supposed to be attending us walked-by came to us and asked whether we are referred there by somebody? And when enquired, she clearly said that cancellation charges are in-fact Rs 2500.

Dejected by the false promise and initial guffaw, decided to walk out after meeting the sales manager.

Yesterday I heard from my BIL that, he got a call from another MASS about Eeco and told him how the original MASS can offer such a deal which is not possible.

This clearly suggests that the second MASS (belonging to different owner) got all our details including the final price offered and others may be too.

[prsnck]

Folks,

Just adding my few cents of experience on Used cars scenario in Bangalore:

Back in 2019, had my original KA reg type 2 OHC up for sale which I took it from an individual owner. Posted in few social media sites like Quikr, Olx etc,. Was not getting decent rates, but I was more importantly looking forward to genuine enthusiasts as vehicle was in good condition and still demand for non-abused type 2/1.5 Exi. Finally decided to get a quote from cars24 office in Bangalore. Took about 30 minutes, decent office and decent staff - checks all areas of car, even with paint thickness tool etc, etc,. They put in some bidding tool and informed me highest quote was close to 88k. Wanted to run away from these fellows - To cut it short, I managed to sell it close to 2 Lakh to an genuine enthusiast in a month or so.

Can you imagine the rate difference: then on-wards I decided not to deal with Used car dealers at any point of time. Always had been direct from buyer, but for future also I won't recommend Used car dealers. Not that all are so bad, maybe you will find good say 1 out of 5, genuine dealers and genuine run cars.

The market rates are high in Bangalore - one due to higher road tax and for vehicles in mint condition without dents, scratches are hard to find and esp enthusiast maintained. Also there is no worry of any corrosion unlike other places close to coast.

Agree that everyone is looking for business and business = profit, but there is a limit and ethics to it. Not loot money in the name of business right. And as many told not good to use the word mafia, but this kind of scenario exist in many parts of our country, not just limited to Bangalore.

regards
prsn

[ChiragM]

Thanks to a Team-BHP Fan (who prefers to stay anonymous) for sending this information in. Heartfelt gratitude for sharing it with other enthusiasts via this Team-BHP page!

1. Every new car dealer has two ways to deal with used cars for exchange - one dedicated used car dealer who either procures the car himself or forwards it to other used car dealers who might be interested. The second way is new which involves these aggregators like cashmycar, gaadi.com. They have dedicated employees who inspect the car at the dealership, put up the report, and by the time the customer takes the TD of the new car, these cars are auctioned online. The rate is then offered to the customer.

2. There are specific agents who share the pictures of cars across the city. These agents are mostly ex-real estate agents who utilize their network to sell cars. They prefer dealing with dealers to reduce the hassles of payment and multiple inspections.

3. Not only in Bangalore, but across India, if you visit any showroom for exchanging your car or any of these aggregators to sell your car, then the quote will hardly differ if you go to places. I have offered 5-7% more than aggregators in the past and closed the deal at my end. To the customer’s advantage, I gave him a delivery note on my company letter head and he knew that the day I sold the car, it would get transferred. In case the transfer gets delayed, he would be able to follow up and know where the car is.

4. A big misconception people have is that if they get their car repaired in case of an accident, at the authorized service centre, then the resale value will be unaffected. Market has a variety of dealers. First are those who deal in accidental / flood affected / meter tampered vehicles and the second who deal in non-accidental vehicles and who wouldn’t mind meter tampering in case the vehicle is run very high. The third category is very rare. Those who deal in non-accidental and non-meter tampered vehicles. These dealers are mostly small players because it’s difficult to find clean cars. The moment you become big in this business, you have to pick up cars in bulk and then you really can’t ignore a few vehicles just because they aren’t mechanically or cosmetically fit.

5. Just a simple advice to everyone - even if you want to make a quick sale, Please stick to your local used car dealer or one of these aggregators. When you exchange vehicles at the dealership, there is no fixed timeline and guarantee where your vehicle will end up. A friend had exchanged his cousin’s i20 at a local Tata dealer for the Harrier in June 2019. In June 2020, I was offered the same car. I back tracked the car and realized the car was exchanged at 44,000 km and by the time it was offered to me, it was at 60,000 km. It went between 3-4 dealers in various cities. I saw the RC and found the surname similar to my friend’s and he confirmed it was their car. He was furious with the Tata dealer. I told him I’ll take care of the transfer and the car was sold in 2 days. I got it transferred ASAP. In the 16,000 km and 1 year, the car had accumulated fines for over speeding, no parking & driving without a license. In case you visit the local dealer, the percentage of risk reduces and that’s the same case with these aggregators. Both my RMs from cashmycar and gaadi.com are in touch with me in case a car is unsold for over 30 days.

[mopy95]

Sadly the issue of car mafia is not only in metros such as Bangalore but also in tier 2 cities such as Bhubaneswar and Cuttack. 9/10 cars are being sold by auto dealers or fin companies. A B class Mercedes is being sold at 3 different prices by 3 different people. Shame, what OLX has turned into.

[anoopGTkrish]

The way dealers communicate with each other is quite low tech. They have massive whats app groups with a high number of local and authorized dealers. The moment you walk into a showroom for exchange or sale, they click a pic of the RC Card/ RC number and circulate in the group along with the price offered. Once this is done you are bound to get the same initial low ball offer from any other dealer in the city. Experienced this first hand while trying to sell my swift.

[smsrini]

I'm looking for some classics read Mercedes 190, or w124 and it's the same situation. Most of these cars are.advertised by dealers and the price quoted are sky high.

A certain premium can be expected given some of these are not available in high numbers. But still the rates are exhorbitant.

[ramnaresh_2000]

Originally Posted by smsrini

I'm looking for some classics read Mercedes 190, or w124 and it's the same situation. Most of these cars are.advertised by dealers and the price quoted are sky high.

When we try to sell a car to dealer they all will apply below logic

• Depreciation is always calculated on ex-shoroom price
• Zero value on accessories added like leather seats, woofer, roof carriers or touch screen
• Zero value on extended warranty
• 1st year 15% depreciation
• The following years 10% flat depreciation for each year
• Then they decrease value by quoting reasons like flop model, not in demand, color is not in demand, bumper re-painted means accidental vehicle, model discontinued, automatic cars are failures etc and dip the price even deeper

When you go there to buy a vehicle from dealer, suddenly the complete above logic is thrown out of the window. It suddenly becomes a cult vehicle and will be in high demand.

[HTC]

Check this out. Same car 2 posts.
One looks like posted by owner, other by dealer. Cost difference is 40k.
Looks like dealer has cleaned, polished the car. Even if you bargain and bring the cost down at dealer, still he isngoikg to make some good profit because of inflated price.

[ninjatalli]

Originally Posted by HTC

Check this out. Same car 2 posts.
One looks like posted by owner, other by dealer. Cost difference is 40k.
Looks like dealer has cleaned, polished the car.

And reduced the odometer reading by a few 1000s (16k actually) of kilometers too!

[WhiteSierra]

Originally Posted by HTC

Check this out. Same car 2 posts.
One looks like posted by owner, other by dealer. Cost difference is 40k.
Looks like dealer has cleaned, polished the car. Even if you bargain and bring the cost down at dealer, still he isngoikg to make some good profit because of inflated price.

One more thing to notice : Owner posted 97 K kms on the odo in his ad, while dealer along with clean up of car, cleaned up the odo too a little and posted 81K kms in his ad.

Clear cut case of meter tampering. This is the reason I don't trust these 3rd party dealers at all.