Used car prices in India have increased up to 10% in one year: Report
Used cars are not only outpacing new car sales in India but witnessed a price surge by up to 10 per cent in the last year, claims a report by LiveMint. The report claims that used cars are currently being sold at a premium of 7-10 per cent over 2020. The report also points out that used cars are currently short in supply as vehicle owners are delaying upgrading or replacing the existing models due to employment-related difficulties and high inflation shrinking their purchasing power.
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Speaking about the rising costs of cars, Shashank Srivastava, executive director, Maruti Suzuki, said that many customers who were saving money to buy new cars or get them financed find that prices have gone up by the time they come to the market to purchase. he also said that in such cases, a used car may fit their budgets better. Srivastava also pointed out that the value of cars nearing 10 years was seen to drop sharply as various states implemented policies to scrap older vehicles.
The report further claims that the number of vehicle owners replacing a used car for a new one as a percentage of total sales has dropped from 28 per cent during pre-covid times to 18 per cent in 2020-21. This is because the vehicle owners are preferring to hold their cars for a longer period of time with an average period going up from eight years to nine years in the last year. However, Srivastava said that replacement buying is picking up, and the exchange penetration was at 19 per cent in February this year.
Ashutosh Pandey, chief executive and managing director of Mahindra First Choice Wheels, said that used cars have always been a supply-constrained space, and the recent spurt in demand has only exacerbated this gap. "This has led to an increase in the prices of used cars by 5-15%," Pandey added.