Which second hand car should you buy?

Mint Money spoke to 20 car dealers to find out which cars have the highest and lowest resale value
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First Published: Mon, Jul 22 2013. 08 03 PM IST
Ramesh Pathania/Mint
Ramesh Pathania/Mint
Updated: Tue, Jul 23 2013. 02 30 PM IST
There is no doubt about the fact that the go-go days of “India Shining” are over. If spending was about lifestyle needs and snob value then, it is all about value now. While the Indian buyer has always been value conscious, the current slowdown in incomes has made the focus even tighter. And nowhere is that focus more in evidence than in the car market where one of the key factors for choosing a particular company and brand is the resale value of the car.
Gone are the days when the car was replaced only when it totally refused to start, despite the push-start efforts of the neighbourhood. Cars are replaced now once the family needs change or a newer more fuel-efficient model comes in or simply because maintenance of a five-year-plus car becomes an issue. Says Nikunj Sanghi, director-international affairs, Federation of Automobile Dealers Associations, “Historically, Indians used to own cars for decades. However, that has changed. Now, the ownership remains till the loan tenor, approximately four-five years. As soon as the individual pays the loan, he sells the car to buy a new one.”
With the average holding period of a car for the urban mass affluent down to five years, one thing that new car buyers look out for is the resale value of the car. But this is not so easy to get in India in the absence of certified price listings. Says Nagendra Palle, chief executive officer, Mahindra First Choice Wheels Ltd, “Resale value calculation is a result of complex interplay between factors such as market demand, brand, current new car prices, prevailing discounts, new model launches, age of car, fuel type, mileage, spare parts availability and aftersales support.”
To try and get a grip on what re-sells and what does not, Mint Money spoke to 20 car dealers (new and used car dealers) across the country to find out which cars have the highest resale value and which ones the lowest. The car dealers, including online portals, are from Bangalore, Chennai, New Delhi, Kolkata and Mumbai.
The survey was conducted through interviews, emails and phone calls. We asked each dealer three questions. One, which car company and model has the best resale value? Two, which have the worst? Three, what are the parameters used to calculate the resale value of a car? Here is what they said.
Best resale value
In the small car segment (less than 1,200 cc), dealers were unanimous in saying that Maruti Suzuki India Ltd cars have the best resale value followed by Hyundai Motor India Ltd. Says Kunal Khattar, vice-president, Carnation Auto India Pvt. Ltd, a multi-brand auto sales and services network having 25 outlets across the country, “Maruti cars—Alto, Wagon R and Zen—are low on maintenance and high on value.” Agrees Kuunal Malhotra, managing partner of Kolkata-based multi-brand car dealer AutoBarn Inc., “Maruti and Hyundai cars fetch highest resale value as these two dominate the small car market.”
Japanese car makers Honda Cars India Ltd and Toyota Kirloskar Motor Pvt. Ltd dominate the big (above 1,500 cc) car segment in terms of resale value. Says Arun Bengani, owner, Kolkatausedcars.com, a portal for used cars, “Toyota Innova and Honda City have the highest resale value mainly because the aftersales service of these cars are great.”
Worst resale value
According to the survey, Tata Motors Ltd, General Motors India Pvt. Ltd and Ford India Pvt. Ltd are the least popular in terms of resale. Says N. Sibgathulla, founder, Royal Carz, a Bangalore-based multi-brand car dealer, “General Motors and Ford have the worst resale value. Tata cars are mainly used for commercial purposes and hence there are few resale takers.”
What affects resale value?
The respondents said that while the standard boxes that people check include things such as the condition of the car, the registration date and the number of miles under the belt, others such as availability of spare parts has also emerged as a key decision enabler in car buying. And, of course, buyers did research the aftersales service experience of their family and friends.
So if you’re in the market for a car, do take note of what the dealers say.
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First Published: Mon, Jul 22 2013. 08 03 PM IST