[Shreyas]

The feelings showed in this thread is kind of a mixed-bag.

I guess, I (actually my father) have/has been very lucky.

My father bought a 2002 FIAT Palio 1.2 in 2004 from a lady professor who loved to change her daily driver to a Gets. So she sold the Palio with the odometer just shy of 10k kms at almost half the price (as she wasn't getting any buyers for her gas-guzzler). She kept the car like a BHPian.

In 2014, when the Palio was sold, we came across a 4k run 2013 Brio EX (not on classifieds) which was bought for the seller's father (who never drove it due to being used to his scooters). The seller himself run-in the car and used daily for a month and it remained idle for six months.
He sold it to us for 4 lakhs (OTR was around 5.50 lakhs). That's around 30% off of OTR.

By the way, I live in Bangalore. The main culprits are the dealers. They over inflate the prices which also kind of gives confidence to the individual sellers to do so.

You have to be lucky in Bangalore. I have seen these over inflated prices in the advertisements posted by the sellers, but never closed a deal. Do these deals actually come through at these prices?

[Cavityavenger]

Originally Posted by Scorpio80

It's a very interesting thought. I have been in the market for a 20L-30L car and the thought of going for new D1 segment sedan vs "Almost New" big-3 car has come up quite often. Here are some things that my thoughts revolve around:

1. Credibility of the seller / dealers / service history - Chances of lemon being sold in guise of a nearly new car. We see a lot of example of cars impacted by floods, accidents, damaged piece, etc being sold

2. Prices quoted - I have spent a lot of time in US and KBB is very reliable in terms of pricing. Very difficult to assess in India. We have multiple threads on Team-BHP itself where markets are cornered by used car dealers and cartel like working between the different dealers. If one buys from the dealer, they add a premium due to the perceived mental peace of additional checks

3. Financing - For a person planning to take a loan, there is additional 2% interest rate on financing for used car, which on 20L loan is approximately 40K/year and will take away some, if not most, of the depreciation benefits of the used car over the loan duration

4. Ownership time - Over a long period, the cost differential will reduce as new car will hopefully last longer.

Any conflicting thoughts are welcome, will help me in making my decision as well.

Great insight and I share your opinion as well. In the US, KBB is the industry standard and the used car price is very accurately assessed and the usual variations are because of options or condition of the car.

However, it's not the same in India. My understanding is that there are usually 3 variations of used cars:
- sold directly by the car owner
- bought and paid for by the car dealer and then sold to the new buyer
- car is advertised by car dealers and when sold the dealers cut off a percentage of the sale.

The extra variables that get thrown in the chaos pit here are
- Manufacture year vs registration year of the vehicle
- variation is road tax rates in different states
- extended warranty vs standard warranty
- The ex-showroom discounts availed by the original owner at the time of purchase by the owner
- when advertised, dealers using stock photos instead of actual photos of cars
- the actual variants and options not listed on the advertisement

Here are some best practices that I've narrowed down, would love to hear feedback from other members on how to make "vehicle buying" more predictable.

- I tend to always ask the following questions from owners/dealers to gather the right information:

1. Month and year of manufacture of the car
2. Month and year of registration of the car (year-end registrations or a large gap from Manufacture date - registration date, typically suggestive of a good discount from the dealer)
3. Variant of the car/ extra options on the car at the time of purchase
4. Duration of an extended warranty, if purchased
5. Actual to-date mileage on the car (a typical range would be 8-10K Kms/year for a standard car)
6. A detailed service history of the car (probably THE MOST important thing to know. Find out the number of insurance claims, parts changed, mechanical issues and if the vehicle was serviced on time and the mileage during each service intervals)
7. Verify if the pictures shared are of the actual car or stock photos

Now a few optionals, but can tilt your decision either way
8. Tire history (cost of new tires if they need to be replaced soon)
9. Brakes, battery change etc
10. Any remaining insurance coverage (in case the owner is giving that away)
11. Any other cosmetic improvements required

I feel that having this information is vital before even setting up a visit to check out the car. About 50% of the cars will be eliminated if you have the proper information before you meet the dealer/owner.

Would love to hear others thoughts on this.

[ZenMaster]

Would someone please be kind enough to explain how these "writing off tax", and "claim depreciation " etc. which were mentioned by GTO work?

Is it the same as " tax returns " in case of business expenses (i.e. Cars bought as "Company Cars")?

What are the options for people who aren't business owners?

[SoumenD]

While it sounds great, in a market like Bangalore that kind of depreciation usually is seen only for cars that are sales dud which have very low demand.

On top of that another important factor is, it makes most sense if one buys it cash down. Going for finance on used cars is an expensive affair going by the interest rates.

[hserus]

Originally Posted by ZenMaster

Would someone please be kind enough to explain how these "writing off tax", and "claim depreciation " etc. which were mentioned by GTO work?

Is it the same as " tax returns " in case of business expenses (i.e. Cars bought as "Company Cars")?

What are the options for people who aren't business owners?

You don't have any such options except company leased car from your employer and now you have to pay GST on that, the tax benefits are negligible.

Your best bet is, don't take a loan and pay it out of your savings if possible.

[kozhissery]

Originally Posted by GTO

But buying a used car that is <3 years old is another level of "pre-worshipped". Truth is, the last 3 pre-owned cars that I myself bought were all:

• Under 3 years old
• Had <20,000 km (two of them had <10,000 km)
• Still covered by the factory warranty
• Up to 40% cheaper than new!

I never used to look into Pre-loved cars till I read the article here in T-BHP couple of years back. My current car is a pre-loved Honda City VMT and like yours, it had below 7500/- kilometres on odometer and was just 6 months old. Got about 22% cheaper than the invoice price, apart from that got the extended warranty/mats/underbody coating/3M protection. The guy had got a long term foreign assignment so was selling it.

After the car, got camera lens, Kindle white paper, recently a watch (thanks to ShajuFX for the watch).

[Thermodynamics]

The logic certainly holds good in C2 and above segments.

Unfortunately, Bangalore used car market has altogether different pricing. Many a times, it makes us drool over used car prices in Mumbai and Gurgaon.

[batladanny]

One question I always had wrt used car prices is whether the 20-30% depreciation (or whatever number) that people talk about, is that including inflation or do you then adjust for inflation? I feel this would also make a significant difference in a country like India where the inflation is 7-9%

eg. Say I bought a car worth 10L today. 2 years later, that 10L is now worth 11.6L considering 8% inflation. So if I decide to sell my car now — assuming 20% less for each year — do I sell it at 6.4L (20% less for two years on 10L) or 7.4L (20% less for two years on 11.6L)?

(obviously a very theoretical example, but wanted to know what baseline people assume when evaluating whether something is a good deal or not)

[Gallardo_17]

Mod Note : Please do NOT post messages that add little or no informational value to the thread. We need your co-operation to maintain the quality of this forum. We advise you to read the Forum Rules before proceeding any further. Request to post ONLY when you have something substantial to add to a discussion.

[KarthikK]

Fantastic thread and great topic to enlighten prospects on what they might be missing out on by picking up brand new vehicles which seem to carry inflated price tags in today's market! One more advantage with almost new vehicles is that they are still under warranty and the service history isn't too big, so that is one less aspect to verify and sift through. While the vehicles are under warranty, the probability of owners servicing cars outside the company service centres is also pretty less.

Some great points have already been made by many members. In addition to that if I might add, I'd say the best deals can be had on vehicles which are:

- Known gas guzzlers (think petrol variants) with low FE (eg. i10 automatic)
- Market duds and less popular options which might have been great cars but have a flop / troublesome reputation.
- Lesser known brands which made enthusiast centric cars (eg. Abarth from Fiat or Laura TSI / vRS from Skoda) and these don't appeal much to most aam aadmi car buyers.
- Discontinued cars and variants even within popular brands
- Luxury brands which are known for high maintenance / running costs and are a difficult sell in the preowned market.

For members saying Bangalore vehicles don't have any such deals, yes Bangalore resale is on the dismal side for buyers, but you'll have to look in these 5 categories to get some droolworthy deals. I'm a big beneficiary from 4 of those 5 categories and would vouch for the cost-effectiveness of these purchases.

Just a year ago, we picked up an almost new preowned Honda Brio in the top end automatic trim which was just 1.5 years old, was company maintained and had run just under 12,000 km for almost 35% lesser than the showroom cost! . To give an idea, the showroom cost of the 2018 Brio VX AT just before it was discontinued was around 8L onroad, and our price worked out to ~5.2L in 2019. Icing on the cake - the first owner had even fitted Stanley leather upholstery (easily 50k+) and 3M CR70 sunfilm (maybe 15k+) all around

A few years ago, we landed a fantastic deal on a 4 year old company maintained BMW E90 LCI 320d in the top end trim, run only 28,000 km, for less than 50% of the cost of a brand new 320d.

There are a few more examples in my own circle but I guess the point is conveyed - great deals are possible, one has to be patient and keep looking at multiple avenues and not expect wonderful deals in the first glances itself. Some of my searches have taken few months of looking around before they materialized. In my experience, company maintained cars are easiest to bargain on and land great prices, compared to individual sellers. They are also likely to be maintained better and serviced on time, not likely to be abused as much and very clean to deal with in terms of quick ownership transfers, etc.

I should also add that sometimes, buyers go overboard in their expectations and keep nitpicking on something or the other to bring down the price. Sometimes they bargain for the sake of bargaining and are not willing to compromise even a few thousands more than their expectations. They lose out on what would have otherwise been a fantastic purchase, just for a few % variation between expected price (buyer's) and asking price.

Don't have unrealistically low expectations of the price, and if a vehicle is in great condition, don't hesitate to stretch the budget by ~5-10% over what you had initially planned. It is worth the additional investment in the long run - could be in the form of saved expenses over immediate consumables like tyres/battery or anything else that you would have spent on after the purchase. Too much bargaining is also a huge turnoff for the seller(s) and even if the enquiry materializes into a sale, the seller-buyer relationship is soured permanently. Try to land at the middle ground cordially and be flexible (same advice goes for the seller as well). In turn, the sellers will also be very friendly, cordial,and are likely to loosen up and reveal much more information about the vehicles beyond what might have been conveyed in their original ad. Most of my preowned vehicles' sellers are still friends with me and are in touch occasionally over social media for months and years beyond the sale.

[hserus]

Wonderful catch, Karthik

And also great advice there for budget stretching. The owners will already be frustrated with brokers combining with each other and low balling the price.

The only thing I would add is don't approach brokers first, try to locate decent cars being sold directly by the owner (one good way to spot it would be just one car being sold on OLX, not ten or fifteen cars)

Originally Posted by KarthikK

our price worked out to ~5.2L in 2019. Icing on the cake - the first owner had even fitted Stanley leather upholstery (easily 50k+) and 3M CR70 sunfilm (maybe 15k+) all around

Don't have unrealistically low expectations of the price, and if a vehicle is in great condition, don't hesitate to stretch the budget by ~5-10% over what you had initially planned. It is worth the additional investment in the long run - could be in the form of saved expenses over immediate consumables like tyres/battery or anything else that you would have spent on after the purchase.

[procrastinator]

Zen was bought from doctor after two years of usage. It had 30K on odometer.
We paid 2.2L while new was 3.2L.

It was a deal because we bought the car of our choice skipping loan.

We realised few things in long term. It was BS1 with carburettor. The new one had MPFI engine. We faced problem during winter mornings in keeping it running.

This model was LX with only AC/Heater. While it was okay at that time but later we realised the ease of power steering. Also, the turning radius was big. I think it was okay for traffic at that time. As cities got tighter parking spaces with the course of time, zen made sure there is good effort involved.

Apart from these two things, we loved this car. We kept it for 17 years.
Although it was replaced with i20 after 8 years of usage.

I20 was bought new. Top model with all bells and whistles.
When electric folding mirrors, steering mounted audio controls and safety features were luxury, today this model still doesn’t feel outdated after 10 years.

Bottomline: Buy Top Model - still in production 1-3 years old used car.

[Thermodynamics]

Originally Posted by batladanny

One question I always had wrt used car prices is whether the 20-30% depreciation (or whatever number) that people talk about, is that including inflation or do you then adjust for inflation?

In general, inflation correction happens automatically. Present new car price is a popular lingo used by dealers. A classic example, Innova owners from 2005-2010 would have likely sold at a higher price than what they had bought. Another example, recently car prices have gone up after BS6, epecially the Diesels. We already see a proportional jump in used car prices.

[AJ18]

An "Almost-New" used car in Bangalore is uncomfortably close in price to a new car. People just buy a new car for a few lakhs more to avoid the possible stress and lack of care that a used car may bring.

However, higher end cars which are less than 3 years old (E class, 5 series) tend to broaden the gap between new and used pricing. Considering that these would mostly be maintained by the dealership, make them seem like a sensible purchase IMO.

[Raghu M]

My opinion, the almost new cars have a premium to the price tag. No broker or dealer uses the depreciation methods mentioned here. Look at OLX and Quikr, any car that is 1 or 2 years old is shown at a 90% rate when compared to the on road price. I have seen Wagon Rs being quoted at 5 to 5.5 lakhs. Unless a car has aged beyond 5 years, bargaining and getting a good deal is not easy. When I look at the almost new cars segment, it feels like by just paying 40K to 50K, you will get a brand new car. I don't think I will go for a used (under 2 year) car given the price and tough bargaining that comes along with the deal. I'll prefer a brand new car.