Strange, fishy trends in the Hyderabad luxury used car market

Almost all the dealers started getting these luxury cars (BMWs, Audis, Mercedes) with Jharkhand, Bihar, Haryana, West Bengal registrations mostly and selling them here, partly hiding that fact in the initial discussions, and later revealing that it's another state car, and giving us an option to change the state registration by paying extra life tax or use the car like that. Also they are stating they can change the state registration at half the actual price if we give them that job.

BHPian madhav14 recently shared this with other enthusiasts.

I've been looking for a used luxury car in Hyderabad and in that process, I observed a very strange trend in the Hyderabad's Luxury used car Market.

Almost all the dealers started getting these luxury cars (BMWs, Audis, Mercedes) with Jharkhand, Bihar, Haryana, West Bengal registrations mostly and selling them here, partly hiding that fact in the initial discussions, and later revealing that it's another state car, and giving us an option to change the state registration by paying extra life tax or use the car like that. Also they are stating they can change the state registration at half the actual price if we give them that job.

I didn't understand what's going on and completely amused by this strange trend that started off-late. Also, everyone started quoting exorbitant prices (5-10 lacs more than market price) for all the luxury cars and started behaving very stringent in negotiations. May be due to the small market, they have been behaving like a consortium or something?

Can we believe them and buy those cars from these other states? Or does anyone smell anything fishy in this whole scene? Any experts, please throw some light on this.

Here's what BHPian ssjr0498 had to say on the matter:

Cars in general do not hold value in the second hand market in the mentioned states. The dealers know this and they buy the cars for dirt cheap and sell it in places like Bangalore, Hyderabad where folks are willing to pay good money and generally the car prices hold up even in the second hand market. Nothing fishy I feel!

Here's what BHPian Sheel had to say on the matter:

Jharkhand has very low road tax. West Bengal has the option to avail road tax for a 5 year / 10 year / 15 year or life time period. I don't know how and where Bihar fits in as taxes are high in comparison to Jharkhand or West Bengal [for tenure].

Similar to few getting their rides registered in Puducherry [PY] or Daman [DN].

Here's what BHPian ramnaresh_2000 had to say on the matter:

I visited almost all second hand dealers in Ayyappa Society area when I was looking for a used luxury car for my friend 6 months back. I noticed the below:

1) Most luxury car dealers are using park and pay model. Owner has to pay a small rent each month to the dealer until the vehicle is sold.

2) Owners who are not using park and pay model will have to send their vehicle to the dealer whenever they find a potential customer. Here, the dealer charges 2% from seller and 2% from buyer on the total resale value.

3) Most of the readily available luxury cars are from states where road tax is less, and hence resale value is less compared to TS. Open YouTube and you will find cheapest luxury car deals in Delhi and surrounding states. Jharkhand has 6% road tax on ex-showroom price before GST. Shocking right?

4) Dealers are cheaky, really really cheaky buggers (most of them). Once you fall in love with a vehicle, they don't nudge. They observe your body language and can grasp if you are genuine customer or just time passer.

5) They add almost 6-10 lakhs buffer on each vehicle. Even after hefty negotiations we can hardly get 1-2 lakhs discount.

6) Once your details are shared with any 1 dealer, your number is shared on their WhatsApp group. No matter which dealer you visit, they would already have learnt about your requirements and budget. They will hardly negotiate because of this prior knowledge about you.

7) Used luxury dealers in any city operate just like a mafia. You can check the thread on Bangalore's used car dealers mafia.

8) They will exploit every loop hole in the book. They do meter tampering. Yes, no matter how sophisticated your car is, meter tampering is still possible. Some of the dealers sell flood affected or accidental cars.

9) Finally they know that a premium customer who is willing to shed a fortune on used luxury cars will not negotiate hard.

10) Lastly there has been a growing trend in Hyderabad, where people buy luxury cars and use them for 6-8 months and then sell them off to same dealer. This model is a money maker for dealers. They get double commission from loan providers, insurance providers, sellers, buyers for the same car.

Better buy a used car yourself in a different state than relying on dealers. Even better option is to buy directly from seller in OLX.

Best of luck.

Here's what BHPian arjab had to say on the matter:

There are around three to four so called "top used luxury car dealers" in Kolkata who have strong connects with Hyderabad.

Used luxury cars depreciate like a bomb in Kolkata and if you buy direct from a owner, say, for example a clean, single owner, 5 year old 320d with 30-35,000 Kms (max) on the odometer can be yours for around Rs 11-12.5 lakhs. The same car will easily sell in South India, (that is either Chennai, Hyderabad, Bangalore, Visakhapatnam) for anything between Rs 17-20 lakhs. Even accounting for dealer holding costs and transportation costs from East to South, a dealer in South can easily make upwards of Rs 4 lakhs per car, if not more.

Also most of the HNI's who buy these cars in Kolkata pay the 5-year road tax and after the 4th year, they start looking at buying something new to add to their garage. Hence the existing road tax for 5 years is not renewed; the "dealer" tells the owner that the car has "road tax fail" and offers an even lower price and makes even more money by re-selling it in South, after having changed the registration, (for which he charges the new owner anyways).

Going slightly off-topic, actually this trend has been there for quite a while. In the late 90's till the mid 2000's, a lot of low mileage Esteem's used to get sold off in Southern cities. Now the same thing is being witnessed in Hindustan Ambassador's. In fact in Hyderabad, Bangalore and to a lesser extent in Chennai, cartels operate between Kolkata and these cities shipping derelict Amby's for restoration or even restored Amby's for re-sale in South. And the average prices are pretty over the top with amounts ranging from Rs. 1.5 lakhs to Rs 3 lakhs for Ambys, depending on the state of (dis)repair.

Thus, do check the paperwork thoroughly when buying these vehicles. For the luxuries, whether there are any legal taxes & financing outstanding and for Amby's, apart from the paperwork, whether they are genuine cars or "ringed" one's.

Check out BHPian comments for more insights and information.