[GTO]

In his excellent 330i review, BHPian itwasntme stated:

Originally Posted by itwasntme

Used:
BMW 530D - long shot as BLR market is controlled by the used car mafia and it's very difficult to find the perfect used luxury one, and that too a highly desirable one like the Big D.

As a lover of pre-worshipped cars, I was intrigued by this statement & have seen mentions of the same earlier as well.

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!

[vigsom]

Originally Posted by GTO

What exactly is Bangalore's used car mafia? What is the modus operandi? How are customers disadvantaged?

I haven't studied the used car market in Bengaluru but have done it elsewhere.

Good cars rarely make it to the open market.

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.

There are cartels and the car just won't move outside these.

Reasons:

1. Owners are wary of phony or shady buyers
2. No guarantee of ownership transfer post sale
3. used car dealerships create a perception that they are the best source for good cars, and can thus command insane prices for the right examples. Potential buyers buy this perception and pay the premium.

Its like the water mafia in Chennai or the sand mafia elsewhere.

[audioholic]

Well unlike a land mafia where one can't practically sell a property without the involvement of middlemen for paperwork as well as negotiations which exists in certain areas of the city, I don't think there is a 'mafia' for used cars. I think that's a pretty serious word to use. Of course there is a very organized system of buying and selling used cars especially the corporate or company leased examples. But this is done due to reasons mentioned by Vigsom. For example, my company has an excellent fleet of vehicles, full of German biggies as well as Innovas(some people choose the practical crysta over a C class), which are hardly used for 8k kms a year and sold off every four years irrespective of the condition. They are rigorously maintained by the respective ASCs, interior detailed every 3 months. The cars are either driven by employees or highly trained chauffeurs.

Can I get hold of these cars? To do so, I should visit the used car outlet of the respective dealer. Usually these cars are handed back to the dealer where it was purchased from and they take care of the sale. I can't buy directly from my own company. For the company, the lower price quoted by the delaer would hardly be a problem, since they dont care about it(also due to the fact that when new cars are brought in replacement to these, they again negotiate for a bulk deal) and also no paperwork hassles and so. This is one channel.

The other one is sparingly used premium cars belonging to homes which have a big collection - It is obvious that these people have a lot of contacts and someone within their circle will manage to get this. Again, the seller would not be very price conscious and what will work here is the fact that they are giving the car to a known person. So the remainder would be enthusiasts who sell to enthusiasts. Only there, you can expect an open market transaction, fair price as agreed to by both parties and so on. But there isn't some system which can be labeled as 'mafia' or maybe my understanding of the word is wrong.

[starter]

I can share my experience. I wanted to sell my car and unaware of such a nexus, i approached a car reseller near Jayanagar 9 Block (about 10 kms away from my house).
He took all the details of the car, did a thorough visual inspection of the car and came back with a super low quote. The car was in pristine condition and i was quite disappointed with the quote.
Decided to figure something out on my own and started to drive back. Very close to my residence, there is another car reseller and i figured, why not give it a try.
This guy just took my RC Card and came back with exactly the same quote as before.
And he also mentioned that he knows i'd already shown it to a dealer in South Bangalore.
That was it. All my cars after that, i've sold them on Team-BHP classifieds.

[samee_arian]

This thread caught my attention as I am planning to buy a pre-owned car and am based in Bangalore. I was under impression that due to current situation, the prices should have toned down a bit, when I checked online sellers, doesn't seem to be the case. Will definitely share my experience soon as I am planning to approach nearby dealers.

[jetsetgo08]

All dealers are hand in glove in the used car market. As others mentioned, the hassle of buying from a used car outlet like Truevalue etc is always lesser as they ensure the documentation and transfers are clean. This applies for mainstream cars.

But, for the luxury cars, I would not be surprised if a car is seen across multiple dealers (sometimes with different odo readings as well). Just the way the real estate brokers do. All are hand in glove, the one who gets the customer takes the %age, if multiple dealers are involved then unfortunately the buyer ends up paying a higher commission.

[WhiteSierra]

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!

Instead of private or individual sellers, I guess most of the cars are sold by dealers / brokers. I've seen such people in Hyderabad and Delhi too. Most of the cars would be posted as individual sellers but if you try contacting them, it is some dealer. These cars aren't even registered in dealers names they like to use terms like 'park and sell', etc where they charge commission from both parties. You never know what you walked into, if it was an accident vehicle or a properly maintained vehicle as mostly these cars are cleaned and polished including tyres. If you take a test drive you'd understand how badly maintained those vehicles are. For a new car you don't have to take a test drive, but for a used car you should definitely take a test drive or even an extended test drive to make sure if the car is mechanically strong!

OT: This might not be related to car mafia but a SCAM alert - a friend of mine was on a lookout for a used car and he zeroed on a 2015 very well maintained Swift VDI on OLX for 2 lakh rupees. We thought it was a steal and called the seller on OLX. The seller was very responsive and he told that he is an Army man, he had to relocate so he was planning to get rid of the car, he was in a hurry to sell it and that explains the less price. He sent few more pictures of the car which weren't on OLX including number plate. No one will get a doubt. So we asked him if we can see the car in person and verify so we can go ahead with purchase process. We live about 15 kms from seller. He asked my friend to first deposit 10 K and then he will send the address to see the car. Strange demand. My friend got a doubt and asked me to call seller as a new buyer. I called him and mentioned that I'm interested in the vehicle, and asked him that the same year and model vehicles are selling for 3.5 lakhs minimum and why he is selling it off for 2 lakhs, he told me that he's originally from Punjab, and he is moving back, since this car bears TS plates he is planning to sell this here and buy a new vehicle there. When I asked if I can see the vehicle , he told me to send 10 K online and then he would ping me his location. I too got a doubt and asked him to send more pictures of car which are not posted on OLX, he sent same pictures which he sent to my friend. Also when he spoke, he clearly spoke Hyderabadi hindi (with some accent), nowhere close to Hindi from North.

My friend felt dejected, atleast he saved himself from getting conned. We blocked his number and proceeded to our nearest second hand car dealer, it is called 'The Car Store' in Balamrai, Secunderabad (just beside Mazda motors). We went there and there were many cars of different models. Owner of the dealer wasn't there but a worker was there, he was quite enthusiastic about cars. He told me the business model how this works. park and sale, RTO works, trade in, various methods of purchase and sale. The prices of used Swifts are around 4.5 lakhs. When I asked him regarding the OLX ad and very low cost (about 2lakhs) and why the prices at his dealership are double, without mentioning ARMY etc, the worker at car dealership himself told that there are many SCAMS going on online, he mentioned that they call themselves ARMY people they demand an 'advance' to show the car and they never show up. Me and my friend were shocked, as he said the exact same thing what that guy from OLX said. The worker at shop told that these guys usually take pictures of cars from basements of malls, tip valet parking people to capture pictures of interiors etc, but after you transfer the money, they will block you or change their numbers. So please do not get tempted on seeing low prices of cars, everything you see is not true on OLX and Quickr. Without seeing cars in flesh or without any written commitment, never pay anyone any advance. This happened last year, wanted to share it via contact us page back then, but somehow on seeing the opening post, decided to type in the whole thing now. My friend finally bought a 2012 i20 magna diesel for 3.6 lakhs, run only 38k kms from an individual seller on Quickr which I consider as a good deal.

P.S : It is always better to sell or buy a car through Team-BHP classifieds as the car will be sold / bought by a fellow enthusiast and you wouldn't have to worry about quality of cars. Rather than pre-owned, these are pre-worshipped vehicles. I drool over used Civics on Team BHP classifieds, although I don't need one. I keep checking out used Thars, Civics , Mercs all the time.

[Rajeevraj]

I am assuming itwasntme meant the used luxury car market as opposed to the overall used car market. Although not personally aware, I think in this segment it is mostly controlled by a network. Whenever I casually browse such cars on classifieds, very rarely do I get to see an individually listed car. With the nature of the market in Bangalore where there is a large corporate churn of such cars , I assume it is a high margin business and controlled by a few. Even individuals selling at the luxury levels would not get into the hassle of direct selling.

At the regular used car levels, one thing is certain, the quotes you get for selling are extremely low and the buying prices are extremely high. Not sure if this is the same in other cities. So pretty sure there is a network that is active to ensure that everyone one is on the same page. But that is true for a lot of things apart from used cars( real estate for example) and don't think it would be specific to Bangalore.

[wildsdi5530]

Originally Posted by starter

And he also mentioned that he knows i'd already shown it to a dealer in South Bangalore.

In this age of WhatsApp, That should come as no surprise. The moment you showed your car, It was probably entered into the network.
A similar thing in new car dealerships, when you visit a showroom for the first time, a salesman will tag you and then wherever you ultimately buy a car, that salesman will get the commission.
In used car sales, Bangalore I've noticed that the margins are considerably high. I remember in Coimbatore my cousin sold his Skoda Yeti for 13 lakhs. and the dealer was quoting 16 lakhs. That seems quite reasonable. In Bangalore, a friend sold a 2006 Porsche Cayenne for 6.5 Lakhs. The dealer was quoting 12 Lakhs.
Once funnily, I visited the Maruti TrueValue dealer near Yelahanka. All the Cars on display had price cards which was more than the Ex-showroom of the cars. On asking further, was told about 1 year warranty provided, accessories installed, etc. Saw about 25 cars there and decided that buying new would be better.
Buying used in Bangalore is a harrowing experience even with private sellers. Straight off the car will be overvalued by 40%. Plus you're expected to pay for the accessories installed. And the owner will not help with the transfer of documents which you will have to do yourself.
But If you hunt around, you will definitely get a great deal, private or otherwise.

[WhiteSierra]

Originally Posted by jetsetgo08

All dealers are hand in glove in the used car market. As others mentioned, the hassle of buying from a used car outlet like Truevalue etc is always lesser as they ensure the documentation and transfers are clean. This applies for mainstream cars.

This is the exact reason we purchased our Wagon R K10 2012 model from Maruti true value in 2016. We were on market for a city beater car and wagon r made perfect sense. Purchase from TV guys was hassle free. We bought the car from Varun motors , Begumpet. Just like new cars, they also gave 3 free services on labour, along with 1 year warranty and background inspection checks for non accidental vehicle. The purchase process was as good as buying a new car since it was showcased and delivered at Maruti dealership itself.

Originally Posted by wildsdi5530

Once funnily, I visited the Maruti TrueValue dealer near Yelahanka. All the Cars on display had price cards which was more than the Ex-showroom of the cars. On asking further, was told about 1 year warranty provided, accessories installed, etc. Saw about 25 cars there and decided that buying new would be better.

True. We purchased the vehicle for 3.5 lakhs, while the price of new car on road was 5 lakhs back then (in 2016). we thought it could be due to Maruti's high resale value. True Value margins are also high. The car we purchased was 4 year and 21K kms old , very nicely maintained with all service records from showroom.

[Shreyans_Jain]

A similar situation exists here in Faridabad as well. I am looking to trade my City for a new car. Back in Feb, I received an offer for 4.xxL. Now, when I visiting showrooms to hammer a deal for a new car, the offers are in tune of 2.xxL. This is when I am looking to make a purchase. I’ve been to Tata, Hyundai and Jeep showrooms. What’s amazing is that each showrooms’s ‘used car expert’ disappears for 5 minutes with the excuse of working out on offer, then magically comes back with the knowledge of which showroom has evaluated the car before and how much they have offered. It is a true mafia system and all dealers are in it together. Unless you directly sell to a private buyer, be prepared to be ripped off big time.

[landcruiser123]

Originally Posted by vigsom

Good cars rarely make it to the open market.

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.

There are cartels and the car just won't move outside these.

I quite agree with your what you've mentioned. Many of the well-paid executives/companies don't have the bandwidth to sell a car, even if it means a slightly better price. Through dealers, they can avoid having to deal with the time wasters. I think the "cartel" is limited to premium cars.

A friend was looking for a Camry a few years back. Using the help of multiple phones belonging to family, he could get hold of multiple people selling a single car. Belonging to the same cartel, none of them were open to any sort of negotiation. He finally gave up and bought a new Corolla.

Another friend (who probably got lucky) found a well maintained SX4 ZXi from a honest person.

[jkrishnakj]

Originally Posted by wildsdi5530

In this age of WhatsApp, That should come as no surprise. The moment you showed your car, It was probably entered into the network.

.

Ditto experience that I had too. And i am talking about 2011 when WA was non existent then.

The place I went to was also at Jayanagar 9th block and I went there for my M800, 25th year Anniversary model and it was absolutely in pristine condition. I was given a very very low number that I had to decline. On my way back , I saw one used car place at JP Nagar and even before I ask him anything , he says that I was just coming in from the Jayanagar place.

My sister, who used to live close by had a driver. I had to visit her place in the morning and I was aghast when the driver told me about my visits to the places the previous day and was telling me that he could have fetched a better price if I had approached him.

I did feel a bit spooked. I dropped my plans of visiting any used car place to sell and finally did an exchange when I picked up the Brio. That was 7 months after the trials I had with the used car showroom visits.

My best experience was with the Toyota folks. They visit home , assess, give you a quote , negotiate a bit and if it works well , they handover the Cheque and documentation and it is all done.

[puntOOs]

Originally Posted by starter

This guy just took my RC Card and came back with exactly the same quote as before.
And he also mentioned that he knows i'd already shown it to a dealer in South Bangalore.

This is the classic definition of a cartel.

[audioholic]

Speaking of used cars in Bangalore, I know this story might sound like one out of a movie script but this happened around ten years ago. Not sure if I have already mentioned about this in the forum.

My elderly aunt had learnt driving and wanted a Maruti 800 for herself. She managed to find one with the help of another relative and they purchased the car for less than a lakh IIRC. A few months down the line, this car proved to be troublesome and given it was already pretty old gave my aunt tough times demanding frequent repairs. Hence she decided to sell it, and get another 800 which was in a better shape. For this, she contacted a dealer near her house who agreed to keep it in his showroom and sell it. Right behind my house was another used car dealer and my dad reached out to him for the requirement after sometime, he called dad to let him know that he has a very good car available. My aunt came home hearing this and the dealer told we can visit to check the car. I went to my terrace so I can take a look at his parking lot and found a similar looking 800. Same colour and state and immediately got to know something was fishy.

We went to check the car, realised it was the same car my aunt had earlier owned, being quoted to her with a price premium of 15k. Without even talking to the dealer, we were laughing and that day, realised that all these dealers are interconnected and hence they can move around vehicles to have a common inventory. This was ten years ago and today we have whatsapp groups where they keep a central inventory of cars so thats the reason if we visit from one place to another it makes no difference. Hence I would prefer selling my vehicles to individual buyers even if it takes time and effort.