Why demand for used cars from Delhi is rising
What's the story
Delhi's recent fuel ban on older vehicles led to a spike in inquiries for second-hand cars. The trend is especially strong among buyers from other parts of India, particularly south India, who are looking for good deals. The prices of used cars in Delhi have fallen sharply, with traders losing out as they sell vehicles at lower rates.
Government response
Delhi's fuel ban on older vehicles
The 'no fuel' rule for end-of-life vehicles came into effect on July 1. But within three days, the Delhi government requested the Centre's air quality panel to suspend the order immediately. Delhi's Environment Minister Manjinder Singh Sirsa said in a letter to the Commission for Air Quality Management (CAQM) Chairman Rajesh Verma, that the fuel ban is not feasible due to technological challenges.
Market impact
Surge in inquiries for used cars
During the initial days of the fuel ban, companies selling second-hand cars saw a surge in inquiries from customers looking to purchase vehicles. Hanish Yadav, the Senior Vice President and Business Head at Spinny, said they saw a 25% increase in leads for such vehicles during this period. Amit Malhotra, the owner of United Cars India in CR Park, said they received 10 times more queries about second-hand cars during this time.
Price drop
Second-hand car prices have fallen sharply in Delhi
The Chamber of Trade and Industry (CTI) recently noted a sharp decline in second-hand car prices in Delhi, with traders reporting a 40-50% drop. CTI Chairman Brijesh Goyal said the market for overage vehicles has been severely impacted by this sudden downturn. He claimed that traders are being forced to sell cars at significantly lower prices, even at one-fourth of their original value.
Rule clarification
What is the situation in Delhi?
Vikram Chopra, the Founder and CEO of CARS24, explained that if a diesel vehicle is more than 10 years old or a petrol one is over 15 years old and its fitness certificate has expired, it will be automatically deregistered. The legal option in such cases is to scrap the model as the registration certificate cannot be transferred. Even informal sales could make the owner liable for accidents involving their former vehicles.