Bonanza for buyers of used cars

Forget about the Tata Nano for Rs 100,000. Or buying a sleek Yamaha R15 for over Rs 97,000. An array of car models is now available at prices under Rs 100,000, thanks to an expected 20 to 25 per cent fall in used-car prices on certain models, in response to the government's decision to reduce Central value added tax (Cenvat) four percentage points for new cars.

Leading used car dealers said consumers will be able to buy small cars like Maruti Zen, Hyundai Santro, Fiat Palio, Tata Indica, Maruti 800 and sedans like Maruti Esteem, Tata Indigo and Fiat Sienna that are between four and eight years old  at less than Rs 100,000, against the earlier price bracket of up to Rs 1,25,000 (see table).

"There are already lots of sweet deals in the used car market. Sunday's excise cut will pull down prices even more," said Arif Fazulbhoy of Mumbai-based Fazulbhoy Motors.

"Cars that were out of reach of a traditional lower middle class families by about Rs 25,000 are now well within their reach," he added.

Fazulbhoy is even offering a one-year-old Ford Fiesta at Rs 350,000, against the ex-showroom price of Rs 700,000.

Second hand news
Model	Year of make	Old price	New price
Maruti Zen	2000	1,18,000	1,02,000
Hyundai Santro	2000	1,15,000	100,000
Maruti Esteem	1996	55,000	45,000
Maruti 800	1997	50,000	46,000
Fiat Palio	2002	1,10,000	95,000
Tata Sumo	2001	105000	80,000
Fiat Sienna	2002	1,00,000	80,000
Fiat Uno	2000	55,000	45,000
Price in Rs                                              Source: Fazulbhoy Motors

The price cuts coincide with the high season for second-hand sales. "December and January are traditionally the high marriage season which has historically pushed used-car sales. And this year, dealers are very keen to get rid of stock that has built up owing to the slowdown in demand," said a senior executive of Maruti True Value, which sells used cars.

Demand for used cars will also be boosted by the cut in the prices of petrol and diesel because more consumers are expected to opt for small, fuel-efficient cars at affordable prices.

Others, however, say the supply of cars may be affected in the near future. "Many potential sellers might hold their decision to sell for six months and wait for better prices. This could create a supply shortage," said Faisal Lakhani, general manager of Shaman Used Cars based in Mumbai.