Used car prices crash

Prices in the used car market crashed by up to 15-30 per cent, after Tata Motors displayed its Rs 1 lakh car at the Delhi auto show.

The Nano, which is due to be launched in October, will carry an on-road price of about Rs 1.3 lakh (for the base model), which is lower than the price of many used cars in the A segment (which includes the Maruti 800 and Alto).

The price of a second-hand Maruti 800 has dropped over 30 per cent since the Nano was unveiled. To give an indication, the price of a 2002 model has dropped from Rs 1.1 lakh in December to Rs 75,000 today.

A 2003 Hyundai Santro that was earlier available for Rs 2 lakh is now available with an 18 per cent discount at Rs 1.65 lakh.

A 2003 WagonR is currently sold at Rs 1.8 lakh, after a discount of Rs 33,000.

A three-year-old Alto has now become affordable to the former used-Maruti 800 buyer, at just Rs 1.10 lakh.

Analysts and dealers predict that used-car prices will only head further south once the Nano hits the roads.

Accordingly, used-car dealers are bracing themselves for a squeeze on margins. The small car market contributes to 70 per cent of sales; used-car dealers might have to focus on high-end cars.