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Cars for a song!
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The seconds car market has never been so attractive. With banks offering finance and big players giving warranties on used cars, the buyers could not have asked for anything better.
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Photo: K.R. Deepak
Wide range of models: The seconds buyer never had a better choice.
Get a car for the price of a moped! It sounds strange, but true.
Thanks to a fall in the price of new cars, used cars of different makes are flooding the market to suit different budgets. A 15-year old model in good running condition can be got for as low as Rs.12,000 and a similar edition of a more popular brand can be purchased for about Rs.45,000, which is about the same cost of popular motorcycle brands.
The middle class families which could not even dream of cars, leave alone purchasing them, are going all out to grab the opportunity. No wonder, the roads in the metro are being flooded with cars. One need not be surprised if the four-wheelers overtake the two-wheelers in numbers.
Despite the drop in prices and the availability of used cars at throwaway prices, many of the prospective buyers are still unable to make up their mind thinking of the problems that could crop up after the purchase of a seconds vehicle. The first and foremost hurdle in buying a second-hand car is its roadworthiness. The buyer, in most cases, does not know the seller and the chances of knowing his driving habits are bleak.
The number of kilometres covered does not indicate the car's health as there is always a scope for manipulation of the meter. There is a wrong notion among buyers that `doctor- driven' cars are the most reliable. This is a thing of the past when doctors used to drive to their hospitals or clinics from home and back and go for an occasional outing with their families. Today, doctors are opening clinics in different corners of the city, covering 60 to 80 km. a day travelling between them.
"Some of the doctors are travelling hundreds of kilometres every day going to the rural areas along with their kits to treat patients in remote villages. It is better to opt for a businessman's car than to go for a doctor's car," says a car dealer.
Hurdles apart, the buyers of seconds have never had it so good. Financial institutions and even nationalised banks are offering loans on used cars. The interest rates have also come down and there is flexibility in repaying the loan. Some of the car garage owners, who deal with seconds apart from servicing and repairs, have even reduced their commission to attract more customers and stay ahead in the market.
The "True Value" from Maruti is the best bet for those who wish to buy pre-owned Maruti cars without any hassles. Varun Motors, the authorised dealers of Maruti, buy the used cars at rates fixed by the company taking into consideration the kilometres done by the vehicle, the make and its condition. Though the idea of the scheme is to encourage the customers to go for luxury models, they are not compelled to buy new cars. But if they go for a brand immediately, they can avail themselves of the loyalty bonus on purchase of the new car.
"The basic idea of the `Pre Owned Cars' concept, offered by the True Value division of Maruti, is to retain the market share of the company, which has recorded a downward trend in view of the entry of a number of new players. The market share, which was about 84 per cent at one time has now declined to 58 per cent and the company plans to peg it at 60 per cent," says the director of Varun Motors, V. Subba Rao.
The move has paid rich dividends with about 95 per cent of the sellers going for new brands. Every two of three customers are those who graduate to the next brand of Maruti. They get the added benefit of loyalty bonus, which is in addition to all other regular offers that could be available to them. The company has procured 18 cars in just 10 days since the concept was launched in the metro and four of them have already been sold while the others are in line. Of the 18 customers, 17 have gone for the next version. The lone customer who did not go for a new car had sold his car to meet some financial commitments.
"We refurbish the pre-owned car and make it like new. The used car should be worth at least 80 to 85 per cent of a new one. No customer should feel that he is buying an old car. Worn-out tyres and parts are replaced with genuine Maruti parts and the vehicle would be fully serviced. We give a one year warranty on the re-conditioned car, in addition to three free services," he says.
"Only vehicles which are less than seven years old will be procured under the True Value scheme in accordance with the norms stipulated by Maruti. The one-year warranty is applicable only to those vehicles, which have done less than 60,000 km. The warranty is not applicable to those vehicles, which run for more than 60,000 km. However, the three free services would be applicable in both cases," says the manager of the True Value Division of Varun Motors, G.N.C. Reddy.
"Before buying any vehicle, we check the RC book and the insurance certificate to ascertain the genuineness of the vehicle. A 120-point checklist, like noting the chassis and engine number would then be taken up. The vehicle is then reconditioned and sold. A record of the details of the buyer and the seller are maintained by the company, to prevent problems cropping up for either party in future," he adds.
All these advantages are reflected in the catch line of Maruti: "Now you can buy used car with your eyes closed".
"The entry of big players in the seconds market has not affected our business. On an average, we sell eight to 10 cars a month. The price reduction of new cars did not have any impact on the sale of used cars," say the partners of Car Sell, Srirangam Srinivas and R. Siva Prasad, who are in this business for the last seven years.
"The highest selling cars in the seconds market are the Maruti 800, Zen and the Santro. We charge a commission of Rs.1,000 each from the buyer and the seller for vehicles sold for Rs.1 lakh and below and one per cent on those sold for over Rs.1 lakh," they say.
The owner of Prasanna Maruti Care in Muralinagar, Prasanna, who is in business for the last 10 years, says that the entry of big players has hit the secondhand car dealers. Prasanna, who claims not to take any commission from either the seller or the buyer, sells two to three vehicles on an average.
"Servicing is my main business and seconds sale is only to earn the goodwill of my customers," he says.
With so many options in purchase, finance and reliability of secondhand cars, can the buyers ask for anything better?
B. MADHU GOPAL
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