Gone are the days when owning a car was a privilege only a wealthy few could afford.
With the spurt in economic growth in the last couple of decades accompanied by increasing disposable incomes owing to multiple earning members in a family, owning a car has become more of a basic need for the people rather than a luxury.
In this era of globalization, a number of international car manufacturers have entered the Indian market just to cater to this booming demand for automobiles. One can see latest models of cars being launched frequently across price segments to cater to the growing appetite of the Indian masses for the same.
In addition to the new cars being launched, momentum has also been witnessed in the used car segment, which has a great appeal for the first time car buyers as well as frequent car buyers.
Pre-owned cars give greater flexibility to prospective first-time buyers, in terms of catering to their budget constraints, giving them more variety of technologically advanced cars. The boost in the used car segment can be attributed largely to this industry going from being unorganized and fragmented to organized and more consolidated.
Many reputed companies and online players have entered this industry and are providing positive value equation for pre-owned cars. They have also broken the taboo of buying a used car and lowered the consumers’ anxiety by providing stringent quality checks, certifications, warranties and assured after sales service.
The boom in this segment is also being fuelled by factors such as price advantage of used cars owing to a lower rate of depreciation, fair deals and warranties, credible and transparent sale and purchase and easy financing options in the form of second-hand car loans.
According to the research firm, Frost and Sullivan, the pre-owned car market is looking to grow at a CAGR of 12.5 % from 2016 to 2021. And 90% of the sales will be attributed to the sub Rs.10 lakh price bracket.
A lot of financial companies have come forward to cater to the financing needs of such consumers by providing used car loans using simple documentation and quick sanction time. This has led to increased consumer demand and new users being added to the automobile market at a steady pace. Along with first time buyers, the market is also witnessing repeat buyers looking to upgrade to bigger cars without stretching their budget too much.
With the advancement in technology, the holding period of new cars has also reduced considerably giving the benefit to a used car buyer in terms of improved quality, better maintained and less used cars. Adding to this, the lucrative offers made by financing institutions such as Tata Capital on second-hand car loans has put the buyers in a win-win situation by giving them more value for their money.
Financing options with flexible tenure, choice of EMI plans, customized repayment schedules with options of cent percent financing present the used car buyers with opportunities that are too good to be missed!