Imtiaz Alam, a Kolkata-based interior designer, is fond of luxury cars. No, eight-zero figures are not credited to his account every month. Yet, he manages to park at least two luxury cars in his garage. His favourite? A Jaguar F Pace! And what helps him manage this enviable feat? His penchant for buying used luxury vehicles at dirt cheap prices, a trend that’s gold for all autophiles.
“I bought a pre-owned Audi A3 recently from an authorised Audi dealership for Rs 18 lakh. This is a 2018 car and had done just about 30,000 km. Imagine, you pay that much for a new Hyundai Creta or a Kia Seltos!” states Alam.
But it’s not always the entry level luxury sedans that are being sold pre-owned. A close look at the market statistics reveals that more and more people are buying Cadillacs, Chryslers, Hummers, Ford Mustangs — all pre-owned or the preferred term, ‘pre-loved’.
“Expensive cars lose their brand value and depreciate quickly, which will not be the case with pre-owned luxury cars. The aspirational value associated and the cutting-edge technology used in the building of luxury cars makes it a dream for everyone to own one. Bringing such a dream to reality at an inexpensive price sounds a much better alternative,” says Jatin Ahuja, owner of Big Boy Toyz, a pan-India car dealership that sells only pre owned luxury and supercars.
Post pandemic ignition
The car industry has been majorly hit since lockdown 2020. Yet, the pre-owned car market is skyrocketing. According to the Indian Blue Book report released by Mahindra First Choice recently, the used car industry is expected to grow by 90 per cent as opposed to the new car market in terms of volume over the next three years.
Corporate professionals and business owners with an eye on upgrading to luxury cars are now thinking twice before investing, given the current financial scenario due to the the second wave of COVID-19 sweeping through the country. For them, it makes more sense to opt for a pre-owned luxury car at a lower cost and wait till things get normal.
“I was initially planning on buying the Mercedes V Class Minivan. But my textile business was badly affected during the lockdown. So I looked online and found a
43,000 km-driven Audi Q7 in mint condition and got it. And now I don’t plan to let go of this soon,” reveals N Nair, a Kochi-based tobacco trader.
“I have been driving used luxury cars ever since I started buying cars! I had a used BMW 320 D back in 2009, which I bought from my neighbour. Since then, I have owned many used cars. To be honest, when you are driving a Merc or a BMW, nobody bothers whether it’s used or not. Plus, luxury cars, unlike regular cars, don’t need too many garage visits if you take care of it at regular intervals,” explains Aarti Chanda, a Mumbai-based dietician. According to her, the only expense is maintenance and fuel consumption. Luxury cars — specially SUVs - aren’t fuel-efficient. However, as she says, “Comfort, performance and safety are more important for me.”
The status power
Buying a used car is an experience. Big Boy Toyz, which boasts of a wide range of brands such as Lamborghini, Ferrari, Bentley, and Aston Martin, starting from Rs 50 lakh onwards, is investing Rs 15 crore for enhancing customer experience at their dealerships. Most used luxury car resellers have customers ranging from premium restaurateurs and unicorn startup founders to designers and page three personalities. For them, used cars are a good bet - cheap yet plush.
“Gone are the days when buying a used car would be looked down upon. Today’s buyers look for value. The ownership experience is important, not the year of make. Now there are buyers who don’t buy luxury cars but supercars. But the value of a supercar depreciates heavily starting from the first month of purchase! So it makes sense to a used one,” explains Harry Mehta, a Chandigarh-based pre owned luxury car dealer.
“I have fixed clientele. They buy, say, a used BMW 5 Series for Rs 35 lakh. I bring a Jaguar F Pace and call them, they bring that 5 series, pay Rs 3 lakh more and drive the Jaguar home. Now the point is luxury cars depreciate heavily on first ownership. But after that, it stays stable. The ROI is good,” adds Mehta.
Not just metro cities
According to Ahuja from Big Boy Toyz, Hyderabad, Mumbai and Gurgaon are definitely the top three cities with maximum buyers. However, since the last few quarters, they have noticed more buyers coming in from Kolkata, Pondicherry and a few cities in Gujarat as well.
There are plenty of tier 2 and tier 3 cities including Surat, Kochi, Coimbatore and Bhubaneswar that are seeing a higher purchase of used luxury cars too. According to a car dealer in Kolkata, there are dozens of potential buyers in small towns who can afford a Rs 30 lakh used BMW with ease.