Growth in Pre-owned Car Sales | AU Small Finance Bank
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Used car sales growing, supply concerns easing

    by Sumana Sarkar, Autocar Professional
     
    Palwinder Kumar Bhandari’s Bhandari Car Bazar is one of the biggest used car dealerships in the entire Jalandhar region with an approximate vehicles stock exceeding 100 used cars. Bhandari also runs his own YouTube channel under the same name to disseminate information about his dealership and used cars across a greater user base. Here are excerpts of a candid conversation with him on the overall business prospects and used car sales.
     

    How has your business journey been thus far?

    I have been in the business for 20 years now. I was primarily influenced by my brother-in- law who also had a used car business. I got a first-hand understanding of the business dynamics and realised brisk prospects in the used car business. That is when I took the plunge. My business mantra is, ‘Securing the customer’s trust’. To me, trust is an important factor in wooing customers
     

    The details of the Vehicle Scrappage Policy have been announced— what are the implications for the used car business?

    I don’t see any perceptible and immediate impact of the Vehicle Scrappage policy. According to our market study, demand will continue to rise.
     

    What is the demand situation for used cars at the moment?

    The demand is very encouraging. Pre-Covid, we used to sell around 50-60 cars a month but post-Covid we have seen 100 percent jump in sales. Currently, we are averaging about 100-150 cars a month and expect this brisk sales momentum to continue going forward.
     

    Has the supply stabilised now compared to the past few months?

    Yes the supply situation is reasonably good at the moment with a robust flow of used cars. There hasn’t been any huge delay in procurement. Moreover, increase in wait-time for new cars has also added to the demand of used cars.
     

    What is the average ticket size for used cars?

    We are seeing maximum demand in the INR 200,000-250,000 price range for used petrol cars. The bar is slightly higher in case of diesel cars. In this case, maximum demand is seen in between the INR 300,000-500,000 price range. Many companies exiting the new diesel car market is also adding to the higher price band for used diesel cars.
     

    What are the type of models/segment that are seeing maximum traction in used car segment?

    Mostly the demand is different for different users and individual preferences matter. On an average, we see brisk demand in the A-B segment with cars like Maruti – Vitara Brezza, Swift Dzire, Hyundai – Creta, Verna seeing maximum traction.
     

    How easy is the availability of loans for used cars and do customers prefer loan options?

    Getting loans for used cars is quite easy nowadays with many organised and trustworthy players making a foray like AU Bank. Almost 80 percent of the customers we deal with opt for finance schemes and 20 percent go for cash-down payment. I would say, AU Bank is playing a big role in facilitating convenient finance schemes.
     

    What type of digitisation are you seeing in the used car segment?

    Digitisation is making a big impact . . . both enquiries and processing has become faster with the online process. We are able to fast-track the buying process as loans are getting approved in less than 24 hours. This is helping customers a lot.
     

    How many check-points does a used car typically go through at your dealership?

    We undertake a thorough check of the car’s engine, exterior and ensure it is a non-accident vehicle. We refurbish damaged portions if any and we are very transparent with customers about these refurbishments. We believe this enhances the transaction experience for them.
     

    What is the average age of a used car at your dealership?

    We mostly procure used cars that are less than 10 years. Demand differs with individuals and the budget they set aside. But that said, we see maximum sales of cars that are two to three years old.