India's fascination with new cars has led to a bonanza in the second-hand market. Prices have crashed by 40 per cent from two years ago, and one in four used cars sold in India is a foreign make, up from one in 10 in 2004.
A three-year-old BMW Series 3 sells for Rs 8 lakh (Rs 27-30 lakh new), an Audi A4 for Rs 12-14 lakh (Rs 40 lakh) and a Porsche 911 for Rs 14-15 lakh (Rs 45 lakh).
Around 40 per cent of the 500,000 used cars sold every year are sedans. A two-year-old Toyota Corolla sells for Rs 4.5-5 lakh (Rs 9 lakh new), a Honda City for Rs 3.5 lakh (Rs 7 lakh) and a Hyundai Accent for Rs 3.25-4.5 lakh (Rs 5.5-7 lakh). Ford Ikons are going for Rs 2 lakh, almost the same price as a new Maruti 800. A Baleno costs Rs 2.5 lakh, less than half that of a new one.
Sachin Khandelwal, head, automobile finance, ICICI Bank, said the migration of second-hand cars to the upper segment was more evident in the top 40 cities in the country, where most of the big cars command a good market.
He pointed out that the surge in second-hand car sales was despite a much higher interest component on loans of around 15-16 per cent, compared with 8-9 per cent for new cars.
"There are ready buyers for all big cars in the replacement market. The rich are offloading their cars at shorter intervals, which are immediately being grabbed by the growing tribe of executives and self-employed professional in the cities.