Isn’t it tempting to be able to drive around in a luxury car like a used Mercedes C-Class or Honda Accord, for the price of a new Maruti Swift? In fact, there are many who want that bit of image value and luxury, and don’t mind picking up a used luxury car at a price point of Rs 5 lakh-Rs 6 lakh.
Luxury cars often have very poor resale value owing to huge depreciation, which is a disadvantage for the first owner, but a boon if you are looking to buy a six- to sevenyear-old luxury car in the used car market. New luxury cars make sense mainly for corporate purchases.
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Cars such as the Honda CR-V and Maruti Grand Vitara, which don’t see much demand as new cars in the first place, are excellent buys in the used-car market.
Take the case of Deepak Batra of Autozone, who is an automobile accessories specialist. Batra was considering a new premium hatchback in 2012, when he came across a 2007 Maruti Grand Vitara that had run just 52,000 km. He bought it for Rs 4.5 lakh, saving a notional Rs 1.5 lakh on his budget for a premium hatchback. The Grand Vitara is very capable and a fun-to-drive luxurious petrol 4x4 SUV, loaded with features. His savings helped cover the additional cost of fuel as Grand Vitara has lower mileage of 9 kmpl. For the record, a new Maruti Grand Vitara at that time cost Rs 20 lakh on road.
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"It is a very smooth car. I drove it without any issues for another 12,000 km in two years, and managed to sell it at Rs 4.25 lakh, which was a good deal for me," says Batra. He sold the Vitara in 2014. In the two years he owned it, besides regular services, the car didn’t have any other maintenance issues.
"Used luxury cars make sense especially for individual buyers," says Ranojoy Mukerji, an automobile expert, who also believes in looking for great deals in the used-car market. Mukerji bought a 2009 Hyundai Sonata Embera diesel automatic in 2012 for Rs 5.5 lakh. The car originally cost Rs 15 lakh ex-showroom.
Adds Mukerji: "I drove the car for another 13,000 km and sold it a year later because someone offered me a good price." He sold the car for Rs 8 lakh—a rare instance when one actually makes a profit while selling a used car!
Mukerji believes that while the maintenance costs of used luxury cars may be higher, it’s still worth the additional expenditure. For instance, a used BMW 3 Series car would incur annual service costs of around Rs 25,000, which is just about Rs 15,000 more than what it would cost you to maintain and service a Maruti Swift annually.
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So if you are in the market for a new premium hatchback, but are tempted by the thought of owning a luxury brand, do give it a thought. Remember to get adequate insurance cover though, as spare parts can be expensive. The math does add up, if you don’t mind the slightly higher running and maintenance costs. That’s just a small price to pay for luxury.
The author is an automotive journalist. The views are his own.
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