The share of Chennai in the production of automobiles in India is very much significant. The four-wheeler market in Chennai is the base of 30% of India’s total automobile industry. Automobile industry plays a crucial role in the growth of Chennai towards becoming a stronghold of Industries among the south Indian states. The industry contributes about 8% to the GDP of the state and is also a key driver in the state’s industrial growth.
These are the facts which depict the people’s mood in this region and their will to opt for new cars. Similarly, the used car market in this region has also found a great leap in the past decade, which attributes to the interest of the people in going for fresh choice of new cars within a short duration. As a result of this practice, those cars which the people opt out in choice of new cars then become available to the second hand car market.
A study conducted by our expert team at pre-owned Car Fleet has concluded that there has been a sharp rise in the number of buyers for cars older than two years. This is due to the fact that the buyer market is majorly occupied by customers who require a car for family or personal purposes which comprises of 91% of the second hand car market rather than for commercial purposes which points out to a meager 9%. In such cases, Maruti and Hyundai are the front runners in the used car market for hatchback whereas Ford and Honda cars are the most preferred used cars in the sedan segment.
Various Used Car Trade Practices
These are the means by which Used Cars in Chennai come into the trade practice of the second-hand car market. They can be identified as follows
An individual seller is a person who sells his car directly without any middlemen involvement in the trade by advertising in newspapers, internet and other communication media. Usually, individual sellers or buyers with little knowledge about cars are dragged into the used car market by dealers and brokers and are hence badly exploited. Another problem with individual sellers is that it can take more time to sell his/her car.
Used Car Dealers
A dealer identifies prospective sellers and fixes a price which is appropriate according to the market conditions. The usual metrics are brand value, age of the car, mileage (kilometers on odo) among other minor factors. Thereafter he identifies problems, repairs and touchups, and then carries out the needful so as to make it attractive for a buyer’s choice of pre-owned vehicles. The main advantage of this type of trade is that the seller can sell his car in no time and also the buyer has a wide range of cars to make a better selection. Majority of the trade in Chennai is handled by the dealers. At any point of time there will be 500+ of the dealers are active in the chennai
Used Vehicles Dealers on Commission basis
In commission basis, the dealer gets to have an individual’s car under his control for the sake of sale. He acts as a person who is responsible for the car to the buyer but doesn’t pay any sum to the seller of the car actually. The seller fixes his expected price. He quotes the same price demanded by the seller and if the buyer is persuaded in buying the car, then deal is struck between the buyer and seller. After the completion of the trade, the dealer is entitled for a commission from the seller which is a certain percentage agreed well before the deal. The main advantage in this trade is for the buyer as he gets the deal in a pretty cheap rate than procuring a car directly from a dealer as in the previous case.
Freelance Agents (Brokers)
Now coming to brokers, they just act as an interface between sellers and buyers. Brokers are usually people who don’t have real business entity on Second-hand cars; instead they are just mechanics or knowledgeable persons about the pre-owned car market. They identify potential sellers and buyers and match the buyer’s requirements with the seller’s availability. After negotiations, if proper deal is struck between the seller and buyer, then the broker is entitled for brokerage from both seller and buyer. But, the main disadvantage in this type of trade is that there is possibility of broker exploiting either the seller or the buyer whoever has a poor knowledge about the market.
Authorized Dealers – Exchange of Vehicles
Authorized dealers are those who are involved in sale of new cars and also have a separate section in their showroom for used cars. The used cars with these dealers are a result of their exchanging scheme for new cars of the same brand which they sell. The main advantage of this trade is that the seller sells his car at a fair price and also gets a particular sum of down payment for the new car as exchange offer which weighs down the burden of buying a new car for the seller. The merit for the buyer is that he gets a car valued at an appropriate scale and hence avoids any future disappointments. Though authorized dealers are trying to penetrate the market, Chennai buyers are not showing the interest in the services offered by authorized dealers and looking for better pricing always.
A Better solution for everyone
Besides the above mentioned trade practices, the internet serves as an interface between all the five trade people mentioned above (Individuals, dealers, brokers, agents and authorized dealers).
The main advantages of using internet for Pre-owned vehicle trade are as follows
• Direct view of the records of the car by means of photos and its intricate details through internet.
• No need for any research with outside sources as the internet is the best source for analysis of a car in various scales.
• All trades can take place in a single interface.
• Time consumption is very much less.
• If deal is struck, then purchase can take place directly from the concerned party in a single meeting.