Sale of pre-owned luxury cars has risen by 15-30% since 2018: Jatin Ahuja

Authored by Automobile Expert Jatin Ahuja, Founder and MD of Big Boy Toyz.

Out of the entire stock of luxury cars sold in India in 2018, two-thirds were pre-owned. Statistically, the sale of pre-owned luxury cars has risen by 15-30% versus the 3-4% of new vehicles.

What does this trend indicate and why are so many people opting for the former?

New vehicles commonly depreciate around 20 percent when they are brought to the road. Most of them will depreciate another 10 percent during the primary year of use. That is a 30-percent loss in incentive during the first year of possession. Also, with the "right" pre-owned vehicle, it's feasible for an owner to get it, drive it and sell it with little loss in value. Deterioration levels out, more often than not following a vehicle's second year when the pace of depreciation reduces before expanding again around year five. 

A key factor in deciding the expense of vehicle insurance is the estimation of the vehicle. Since a used vehicle has less value than a brand-new version, the expense of insurance ought to be less. Significantly more money can be saved if some aspects of the insurance can be dropped. 

Likewise, with vehicle protection, the expense that states charge to register a vehicle is frequently based on the vehicle's purchase cost. Purchasing pre-owned vehicle is a compelling method to avoid those overheads. 

These days, vehicles are made to keep going for at least 100,000 miles, so prospective buyers don't need to compromise on the general condition just to get a decent arrangement on a pre-owned vehicle. They can get a used (or "pre-owned") vehicle that is without a scratch and fit as a fiddle. 

In any case, customers also have an option to choose from a number of certified programs and long term warranties that most vehicle dealers offer. At the point when they purchase a second-hand vehicle at a dealer’s shop, they'll realize that they've reviewed the vehicle and that it meets the necessities for certification. The greatest advantage they may discover is the dealer’s guarantee for pre-owned vehicles. Toyota, for instance, offers a seven-year 100,000-mile guarantee on certified pre-owned vehicles. This sort of genuine offers is significant when purchasing a second-hand vehicle. 

Every country has laws subject to new vehicle sales tax, however it is not applied to pre-owned vehicles. For instance, in Georgia, purchasing a pre-owned vehicle from a private dealer won't owe any sales tax whatsoever. 

More than 300,000 new luxury vehicles have hit the Indian streets in the previous decade and numerous previous buyers searching for their next ride have exchanged their old cars for new ones, helping the reason for the pre-owned cars setup. Strikingly, the insurance rise that pulled down the new vehicle sales didn't affect the pre-owned portion and offered a smooth path for local dealers in significant metro cities.