Consumers are changing. Indian consumers’ purchasing power is on a rise giving them more capital in hand to fulfill their aspirations. But consumers are becoming smarter too. They are not getting into the trap of upgrading their lifestyle on the cost of investing money in unnecessary buys. When it comes to upgrading lifestyle, there are a couple of assets which everyone wants to possess like a house and a car. While a house is an appreciating asset whereas a car is a depreciating asset. Therefore, it’s always a smart move to spend less on a depreciating asset like cars or any other heavy electronic items. While we agree life has become difficult to be run without a car but the cost of a car can always be minimized. For example, Car is the first purchase of a salaried professional to validate himself of a good life whereas a family would need a car because of the various daily requirements. Thus, there has to be a comparison of car investment vis a vis fulfilling the requirements. In many cases, with first-hand cars, the fulfillment of the aspirations might also turn out to be costly.
Indian market is experiencing a slow organisation of the second-hand car industry. With the presence of organised players providing end to end professional services, it has surely made easy for potential buyers turning into active ones. In earlier days, it used to be a hectic task to look for a pre-owned car through local car dealers. There were various issues like trust problem, condition of the car, valid papers, transfer of ownership so on and so forth. Our objective of fulfilling dreams of cars of Indians is getting achieved with the launch of the online-offline model of OLX Cash My Car. Presence of the physical outlets in major cities and mini metros have led to increasing demand as well as organisation the used car market too. Consumers are realizing the benefits of buying a healthy used car through an organized player like us which is delivering only trust and satisfaction but anything else.
There are various benefits of buying a used car:
- Why spend on a depreciating asset?
A car worth INR 10-12 Lakh gets depreciated by 20%-30% as soon as it has traveled a few kilometers. Though the condition of the car is not depreciated anything close to the cost of the new car. Hence, it completely makes no sense to buy a new car if your pocket doesn’t allow you to take to so much of burden. Every year, there are approximately 20 new car models which are launched across different segments therefore, making the owners sell used cars and buy new ones. And hence, it advised waiting for the right time of the year to buy almost a new car for a lesser amount.
- Enjoy the same features at a lesser cost
In a span of 5-7 years of car usage, various features of the car are intact. Most of the owners maintain the car on a regular basis. For example, Music system, ABS, hand brake, internal decor etc are intact. Hence, one will always pay a much lesser amount to enjoy the same set of features which one would pay a hefty amount for a brand-new car.
- Decreased Insurance Cost
When you are buying a second-hand car then one of the main benefits is that you end up paying decreased insurance cost. The Insurance premium is calculated on the depreciated value of the car therefore, every year the cost of premium would go down. During the transfer of the ownership of the used car insurance papers are transferred too with a recalculation of the premium amount.
- The right time to purchase
Well, one should always know when to buy a used car. You should always do your own online research about the market price of the car model you have been wanting to buy. Brands like Maruti or Hyundai are being sold the most as second-hand cars. Thus, their supply will be better than other brands leading to decreased cost of cars too. Always pick up car models which are easily available because all the costs are calculated based on an online algorithm.
The decline in First-hand car tenure of ownership
There has been a sharp decline in the tenure of first-hand cars because of the options which are available in the market. Thanks to the new launches with new upgrades, car buyers are always on the lookout to sell almost a new car to buy a recently launched car. India is on the rise of consumerism and hence, consumers have started experiencing such purchases not luxury but mandatory.
It’s interesting to see that India’s used car market has been showing a stable growth than the new car market. As per the Economic Times report, from 1.6 million units in 2011, it is now pegged at 3.3 million units (Sept 2018). According to Nagendra Palle, MD, Mahindra First Choice Wheels Ltd, the used car or pre-owned car market will continue to grow at a steady pace of 15% to touch Rs 2,50,000 crore or 6.6 million units by 2021. It validates that a number of individuals are moving out of the societal norms to go for a new car. Think twice before you make the next purchase.