[wheelspinner]

Hello BHPians,

I came across an article on Rushlane that wrote about an MG Hector owner who managed to get 95% resale value for his MG Hector while upgrading to an MG Hector Plus, as exchange value.

Can anyone confirm this?

Article:

https://www.rushlane.com/mg-hector-r...-12392074.html

How is a dealer able to make a margin when he buys back a used car for 95% of its resale value? Does it even make sense?

Cheers

[GTO]

Originally Posted by wheelspinner

How is a dealer able to make a margin when he buys back a used car for 95% of its resale value? Does it even make sense?

Possible in the following scenarios:

- The price of the new car has increased substantially. Just ask owners of 10 year old Innovas what they get in resale.

- The dealer desperately wants the new car sale and makes so much money on it that he gives above market value for the trade-in. I heard of a 3-Series owner who clearly got 2 lakhs above the market-value for his old car as part of a deal for a 7-Series. The dealer probably had a margin of 12 - 15 lakhs on the 7-Series, so it's all good for him in the end.

- It's a paid advertorial by MG.

[sv97]

Originally Posted by GTO

Possible in the following scenarios:

- It's a paid advertorial by MG.

Agree with this possibility and looks like a one-off incident because this is what came to my mind after I went through this article a few days back and if it had been true in all cases then MG would have hit the headlines in almost all National Dailies claiming the highest resale value in its class and those huge front page ads or ATL advertising as we call them in marketing terms.

Didn't post it here because I thought it might not be worth discussing on T-BHP as Rushlane has a reputation of publishing such kind of articles which are solely for the purpose of advertising which T-BHP condemns.

Looks like as if this has been done to get some attention amidst the Safari launch since its only the re-sale value in case of Tata which might be poor apart from that it trumps MG in most aspects.

[84.monsoon]

Used Hector prices are quite low on OLX, so I don't think this is a normal transaction. Could be dealership supported or advertorial as mentioned by GTO.

[CARDEEP]

Originally Posted by GTO

Possible in the following scenarios:

- The dealer desperately wants the new car sale and makes so much money on it that he gives above market value for the trade-in. I heard of a 3-Series owner who clearly got 2 lakhs above the market-value for his old car as part of a deal for a 7-Series. The dealer probably had a margin of 12 - 15 lakhs on the 7-Series, so it's all good for him in the end.

This happened in case of someone I know. They bought a 5-Series & their beater Santro Xing was valued at 7 lakhs around 5 years ago.
Yes the deal included payment of 20 lakhs hard cash g 30 lakhs loan, but, this is definitely the case as I had reviewed the papers thoroughly. I actually I was advising/ assisting for a business loan & these documents were presented to me.

[PrideRed]

The Hector Smart DCT was sold for 15.6L. The car costs 19.1L OTR now in Delhi and may be 18.5L a year ago(provided MG has hiked price after the car was bought). The article simply compares resale price with ex-showroom price which is totally illogical to me. Glad that Rushlane did not compare resale price with ex-factory

Just taking my example in similar lines as above
Bought Innova crysta GX in 2017: OTR 18.3 (Ex showroom: 14.78)
Innova crysta GX price today: 18.12 Ex showroom(22L OTR)
Sold Innova in 2021: 16L

So as per Rushlane I got 90% resale after using car for 3.5 years with 50K on ODO. If I am to consider Ex-showroom at 2017, then I got 120% resale value.

Looks like paid article to me.

[ajmat]

Could it be that the whole deal was shall we say - "staged" in order to keep prices high using this deal as a sample reference.

Look at the prices of the similar cars in the market in Delhi - source OLX - not added the links as these will expire.







The above ones have been around since September







It will be interesting to review this in a month or two whether these cars get sold or the trend continues

[Sebring]

MG is doing the right things. The biggest negative attributed to the car is that it is Chinese and wont have resale value. Well, MG just demolished that perception. They had guaranteed a good resale value, and have just put their money where the mouth is. Yes, this is a PR exercise at its most basic. But bound to stick in memory

[PrideRed]

Originally Posted by Sebring

MG is doing the right things. The biggest negative attributed to the car is that it is Chinese and wont have resale value. Well, MG just demolished that perception. They had guaranteed a good resale value, and have just put their money where the mouth is. Yes, this is a PR exercise at its most basic. But bound to stick in memory

But this one is really poor PR exercise. It's a blatant lie and very wrong comparing resale price with ex-showroom. Wrong calculation aside, they should have highlighted actual resale value of 80%, which to me is decent for a year old Petrol car with poor FE. Appears like frustration is creeping up as even after bringing 5,6,7 seater variants they are finding it hard to compete against Innova despite cheaper price tag and long list of features.

[Hayek]

A friend of mine sold his year old MG Hector (Mumbai personal registration) back to the dealer at ex showroom price, just before he left on a transfer abroad. So for whatever it is worth, they are honouring this sale price. Not sure of too many cars bar the Innova that can fetch ex showroom price after one year. Even relative to OTR, 10% depreciation in a year is nothing. Incidentally, he also had to sell a newer Gen 5 Honda City, and he got significantly less than ex showroom price for that.

[ninjatalli]

Originally Posted by GTO

- It's a paid advertorial by MG.

Originally Posted by sv97

Rushlane has a reputation of publishing such kind of articles which are solely for the purpose of advertising which T-BHP condemns.

Damn - all these days I always assumed that Rushlane was a side portal of @GTO (Rush being the common aspect)

Only after this thread did I go and check the "About Us" on that portal.
Ignorance is bliss. Indeed

P.s. OT Alert!

[landcruiser123]

Also, adding to the points - the dealers might be getting extra bonus from the company for selling a Hector Plus. MG will definitely be vary of the competition from the Safari and upcoming XUV 500 which have the additional seats. Not to mention, the Citroen C5 Aircross is also going to be a formidable competitor.

So, it helps to sell more Hectors & Hector Plus at thinner margins. Also, such news articles dispel the notion that MG has low resale value.

Short term loss for long term gain in MGs book. With the large parent company, I'm sure they have money to burn.

[Sebring]

Applies to other cars in the segment too. Who can compete with the Innova? It's blazed its own path. Regarding lies, well this is the business world for you . Profits for ethics!

Originally Posted by PrideRed

It's a blatant lie and very wrong comparing resale price with ex-showroom. Appears like frustration is creeping up as even after bringing 5,6,7 seater variants they are finding it hard to compete against Innova

[srh]

Originally Posted by CARDEEP

This happened in case of someone I know. They bought a 5-Series & their beater Santro Xing was valued at 7 lakhs around 5 years ago.
Yes the deal included payment of 20 lakhs hard cash g 30 lakhs loan, but, this is definitely the case as I had reviewed the papers thoroughly. I actually I was advising/ assisting for a business loan & these documents were presented to me.

This is either a case of money laundering or a case of inflated price of the 5-Series

[CARDEEP]

Originally Posted by srh

This is either a case of money laundering or a case of inflated price of the 5-Series

It's more of latter, as the whole thing was white everything was in system/ books, unlike the rich farmers who bring in cash in jute sacks. As a qualified professional, I think I'm learned/experienced enough to check & certify money trails in this case.