BANGALORE: It’s just the time for you to step on the accelerator and rev up those engines. For this economic downturn has come with a silver
lining.
Close to 1,000 second-hand
have flooded Bangalore’s market in the last four months and this oversupply has pushed second hand car prices down by a whopping 30% as compared to a year ago.
In some cases the price drop has been close to 50%. “500 cars offloaded by Dalal street investors, bankers and IT professionals,” reads an advertisement of a leading second hand
in the city, Classic Automotives.
“Due to the recession many IT professionals have given up their cars, so we are selling them between Rs 50,000 and Rs 2,50,000,” reads another advertisement of a second-hand car dealer in Whitefield. Many are being forced to sell their cars in order to pay off other loans, cut fuel expenses or because they have been laid off.
And the result: a 2008 model BMW 3 series (single owner and clocked just 300 km) available at Rs 25 lakh. Its market price last year was Rs 35-Rs 37 lakh and should ordinarily have been in the market this year for around Rs 30 lakh to Rs 31 lakh.
A 2008 Honda City was driven out of a dealership recently for a cool Rs 6 lakh, a 2008
Santro went for just Rs 3 lakh. A 2008 Maruti Alto (just three months old) has a discount tag of Rs 1 lakh. “Since October last year, we have built an inventory of over 300 second-hand cars and are expecting another 300 to come in the next couple of months,” says Khalid Sait, MD of Classic Automotives.
“Real estate developers and many MNCs that own fleets of luxury cars hypothecated to banks have started disposing them. Banks in turn are putting them up for sale, which we are offering at throwaway prices,” he adds.
So much so, a second-hand car dealer in Whitefield is selling a Mercedes for just Rs 15 lakh. And just to offload inventory, Classic Automotives is planning to launch a scheme that will offer buyers free gold worth Rs 1.25 lakh with the purchase of a car.
Priyanka Govind (29) bought a Maruti Swift last year for Rs 5.6 lakh. She was expecting a promotion and an increment, which would help her with the EMI. But that pay hike didn’t happen. “I opted for a five-year loan at an EMI of Rs 10,000. But it was becoming difficult to manage with a salary of just Rs 35,000,” says the IT professional.
She disposed of her car in the same year for just Rs 3.8 lakh. An official of Car House, a second-hand dealer in Koramangala, says, “In the last four months, on an average, the number of people looking to sell their cars has increased by 60 a month, as compared to the same period in 2007-08.”
He adds, “Most of the sellers are IT professionals, who have been hit by the downturn in the market.”
CAclubindia
