The growth of Pre-owned Luxury Car Market

The word pre – owned was not well received by the customer because of it being referred as ‘second hand’. People were hesitant to get a pre-owned car because they would always worry about the additional costs of maintenance, break down and other various factors.

The stigma of the pre-owned automobile industry is definitely changing, and people are opening up more to this segment. The Covid-19 pandemic has played a big role in the upliftment of this segment as people want to use their financial resources in other areas but yet have the luxury car, they have always desired. The pre-owned sector is able to cater to this need at this moment of time.

The pre-owned extravagance vehicle showcase in India is developing at twofold the speed of new extravagance vehicles fragment. Developing flourishing among purchasers, including expanding number of women purchasers, request from littler towns, high extra cash and alluring value focuses. As per sources, while the new extravagance vehicle showcase is developing at 12%, that of pre - owned, or pre - owned vehicle advertise, is developing at 22%. With the GST acquiring uniform tax assessment framework, the two dealers and purchasers of pre - owned vehicles are profiting gigantically.

One can purchase pre - owned vehicles, for example, BMW, Audi or Merc in a value band of Rs 10 lakh and Rs 15 lakh, which is equivalent to purchasing a top-end Honda City or Hyundai Creta, prompting an account 80% development over the most recent two years.

One of the key explanations for wonderful development direction is the pre - owned extravagance vehicles that have become an appealing choice for the optimistic purchasers eager about driving a more than multi year-old BMW 3 Arrangement over another Skoda Magnificent. By and by, the pre-owned extravagance vehicle advertise is developing at twofold the speed of new extravagance vehicles showcase.

The most compelling motivation driving the development of pre - owned vehicles in India is the expanding buying intensity of the nation's administration class that has expanded complex over the most recent two decades. Also, considering the quick paced deteriorating estimation of the extravagance vehicles, the proprietors are consistently in a hurry to redesign by selling the pre-owned models.

Wherein for online stages, we will discover multi-brands of vehicles, be it Mercedes, BMW, Audi, or Porsche. On the off chance that we contrast and ordinary vehicle brands with online stages, we get numerous choices concerning brand and worth.

Thus, the selection of brands is one of the huge viewpoints. Also, utilizing calculations just as advancements like artificial intelligence, a client can without much of a stretch get or access to information driven clever evaluation of a vehicle's condition and current worth, in view of complex valuing models. Aside from these, improved protection inclusion, guarantee and a large group of different administrations (which are offered in new extravagance vehicles) assist clients with going for pre - owned vehicles.

By FY22, a yearly income run pace of $300 million can be evaluated.

India Used Premium Vehicle Market Standpoint to 2023 – Development Moved by Footing from Advanced Stages, Flood in Confirmed Business, Decrease in Normal Vehicle Cost and Quicker Dispatch of New Models, expect that with presentation of new innovation and developing interest from non-metros will have positive effect available. The attention on improving after deal administration, simple account and renting will drive the interest for utilized vehicle deals. It is normal that India Pre - owned vehicle market will enroll a multiyear CAGR of 11.7% during the period 2018-2023.

The Used Premium Vehicles showcase has been seen to be at the development stage, with the opposition been profoundly divided attributable to the nearness of unorganized channel. The business is blasting with extending deals volume inferable from fall in normal ticket size, change in client observation towards utilized premium vehicles, extension of online deals and lead age by ordered organizations, expanded sources to back the vehicle and better affirmations accessible in the market. Dominant part of sourcing is done through exchange ins composed market while it is made through purchase and sell/park and sell divert in chaotic portion.

Demand expanded primarily owing to rise in the number of HNI’s & per capita disposable income. Change in mindset of domestic population for favouring used cars over new cars also facilitated the shift. India has more than 300 thousand HNIs and their population is on constant increase. Expats and NRIs returning to India have also created the demand.

The extension of business and SMEs in level 2 and Level 3 urban areas and development of IT and administrations organizations in these urban communities has pulled in numerous high paid people to be posted in these territories drawing in the potential market for extravagance utilized vehicles. Improving the Administration organize has gone about as key driver for pulling in buyers in these urban communities. Organizations, for example, Mercedes have propelled versatile assistance habitats to provide food their client adjusting needs in remote regions of the nation.

The reduction of goods and services tax (GST) on used luxury cars to 18% from 28% has narrowed the cost differential between organised and smaller unorganised dealers. The former pay GST on the profit they make, while the unorganised players are said to avoid paying this tax. A majority of customers are repeat buyers, they see buying a three year-old Audi or Merc as far more valuable than buying a new car. These cars are also usually maintained well because predominantly they are chauffeur driven.

Over 300,000 new luxury cars have hit the Indian roads in the past decade and many past buyers looking for an upgrade have traded in their old cars for new ones, helping the cause of the used car market. Interestingly, the insurance spike that pulled down the new car sales growth didn’t impact the pre-owned segment and offered a good cushion for bleeding dealers in major metro cities, said people familiar with the matter.

A year ago, pre - owned vehicle deals rose in excess of 30 percent to around 60,000-70,000 per year, contrasted with around 17 percent development in new vehicle deals to 40,000 units.

The development in deals of pre - owned vehicles is, indeed, becoming quicker than the general recycled vehicle advertise, which has a development pace of 15-20 percent.

The normal cost of pre - owned vehicles, for example, those from Mercedes-Benz, BMW, Audi, Volvo and Panther Land Wanderer are between Rs 25-35 lakh. The highest point of-the-line models from Ferrari, Bentley, Porsche, Lamborghini are likewise popular, though with a sticker price of over Rs 1 crore. Aspirational buyers with high disposable incomes are looking to upgrade to premium car brands. Most new car dealers who do trade-ins do not have an outlet to sell it.

Last year, the new luxury car market clocked volumes of nearly 40,000 units. Mercedes-Benz remained the market leader for the third year followed by BMW, Audi and Jaguar Land Rover.

Lowered entry price tag coupled with the launch of compact models and the introduction of new models helped the new luxury car industry sustain growth momentum. India's used luxury car market has grown ten times in the last 10 years, as per data shared by companies.

The industry is booming & right now is the time to take advantage of the pandemic to get these dealers to be online for a better reach & visibility out there to get the target customer to their dealerships.