Should you buy a 5-6-year-old pre-owned luxury car?

used luxury car 5-6 year old
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A pre-owned luxury car is essentially a used luxury car that has been reconditioned and tested for fitness by verified technicians before the car is put up for sale. Many first owners of luxury cars in India nowadays are looking to sell their rides after 5 to 6 years of use for different reasons. Undoubtedly, luxury cars are built to last, and the performance of the used cars is expected to remain in top condition if maintained well. Owners of luxury cars tend to either try a more advanced or upgraded model of the car they already own or look to try a different luxury car brand altogether.

Since luxury car makers are also offering newer models more frequently, people who can afford a luxury car can very easily put up their previous ride for sale and go for the newer models. Luxury carmakers are looking at aggressive expansion of their market, which is driving the sales of new cars and pre-owned luxury cars.

Used luxury car models we can buy within 5-6 years of usage

The Indian luxury car market has expanded significantly in the latter half of the last decade. New entrants in the market, affordability and competitive atmosphere have allowed the automobile industry to flourish by leaps and bounds in India. People are looking to buy pre-owned luxury cars from verified dealers. The spirit of experimentation is leading more and more customers to try out some of the most popular car models of the yesteryears before committing to a brand new car.

In reflection of the above section, there are a number of high-performance and highly dependable car models that you can buy even after 5 to 6 years of rigorous usage by first-time owners.

  • BMW

The entry-level BMW 3 series and mid-segment BMW 5 series top the charts for most sold used luxury cars in India. BMW has retained its character for nearly a century now, backed by constant research and development that it undertakes relentlessly. These cars are fast, efficient, and comfortable at the same time. You can buy a pre-owned BMW 3 or 5 series even after 5 to 6 years of usage from verified dealers. BMW has always been a driver’s car, and these rides promise high performance for a long time.

  • Mercedes

The Mercedes C class is one of the most sought-after used luxury cars in India. The unparalleled luxury is a rarity when it comes to this segment, and people always are on the lookout for a Mercedes when exploring their options. C class’ sporty look makes it a head-turner on the city streets and never fails to make a statement. A well-maintained Mercedes Benz C class sedan is a good buy even after 4 to 5 years of rolling on the road.

  • Volvo

The Volvo XC 90 is particularly a very new entrant in the luxury car market, but buyers are still willing to shell out money for a pre-owned Volvo car. The 2018 debutant (in India) is not only safe but highly efficient and power-packed. It has a robust built and is built to withstanding the Indian conditions for a long time. Since it started producing the XC 90 in India, the affordability factor has been up a notch. Also, the Swedish manufacturer focuses on the safety features that no other brand is offering in their vehicle. This alone makes Volvo very competitive in the luxury car market.

  • Audi

The Audi A4 makes this list as one of the most bought luxury cars in the used or pre-owned luxury car segment. The executive sedan is fast and loaded with features. There are few areas where Audi gives stiff competition to its German compatriots. The cockpit-style instrument cluster, intelligent driving modes, and excellent throttle response make this car stand apart from the crowd. You can easily find a used, well-maintained Audi A4 in the pre-owned luxury car segment due to Audi’s upgrades in the newer models, making way for the older versions in the resale market.

  • Range Rover

The Land Rover Range Rover is one of the best SUVs available in the pre-owned luxury car market in India. Owing to the all-wheel-drive capabilities and extremely delectable interiors, this high-performance vehicle is a pleasure to drive as well as ride. The off-roading capabilities of this car make it one of the most loved Sports Utility vehicles in the luxury car market. Moreover, the resale value of the Range Rover is also high that makes it a prized possession not only to first-time buyers but also to the people looking to buy a luxury vehicle that has been used for more than 3 years.

used BMW 3 series

Does 5-6 years old use luxury car require high maintenance?

Ideally, car experts believe that a luxury car that falls within the time window of 2 to 4 years of usage is easier to maintain. Beyond 4 years of usage, a luxury car may have to be maintained more carefully. The reason is simple. Car enthusiasts try to test the limit of the brand new luxury car as soon as they get their hands on one. The younger generation tends to test the car, while older owners take extra care while driving the car. Mostly, while looking for a pre-owned luxury car, the owner’s history can be decisive in determining the overall fitness of the ride. For example, institutional vehicles (vehicles used at hotels, airports, etc.) tend to be more carefully maintained and are generally in pristine conditions even after 5 years of usage. Chauffeur-driven vehicles are well maintained and fault-free. The fitness of individually owned vehicles, on the other hand, can be determined only by the usage history and driving pattern of the driver. More mileage on the odometer might not necessarily mean that the vehicle health is fragile, and vice-versa.

While used luxury cars are cheaper and easily available nowadays due to more number of units sold in the last 5 to 6 years, the judgment to buy a car that would require less maintenance, in the long run, can only be taken after thorough research.  A vehicle used for 5 to 6 years previously might need frequent visits to the service center, but it is more about diligence than routine. General maintenance of a used luxury car is pretty simple and requires little practice to get used to. Thus we can safely conclude that maintaining a 5 to 6 years old used luxury car is manageable.

Can we get a used luxury car within 3-5 lakh INR in India?

It is easy to find a used luxury car within a 3 to 5 lakh price range in India, but the car’s condition could possibly be questionable. In this price range, one can expect to find a luxury car that is more than 10 years old. Also, most individual and institutional owners prefer to sell out a luxury car that is more than 5 years old. This means that in the above price range, you should be wary that the luxury car may have switched multiple hands before coming to your attention.

Luxury cars are by no means cheap, even in the pre-owned segment. The bottom line for any used or pre-owned luxury car that does not exceed 4 years of usage after being bought for the first time should ideally fall between INR 15 lakh to INR 20 lakh. Depending on the overall condition and fitness of the car electronics and mechanicals, the demand price can go above or fall somewhere in between this range. More importantly, since the cost of ownership is a big determinant, it is imperative that in the long run, the cost of buying and owning a pre-owned luxury car should go above INR 20 lakh anyhow for a 3 year ownership period.

used lexus car

Why do people sell their luxury cars after using 4-5 years?

A common question that arises in first-time buyers’ minds is why people normally sell their luxury cars after using them for a minimum of 3 years and a maximum of 5 years. There are several factors at play when deciding the ownership period and the right time to sell the ride. These factors influence different owners differently, but the general idea remains the same. Some of the important reasons that determine the resale of luxury cars after 4 to 5 years of usage are:

  • Upgraded models: Luxury car owners typically fish for newer upgraded models of the car they already own. The frequency of introduction of newer, better models determines the time of sale of the previous car. Car enthusiasts can afford the new offerings from the brands of their choice, and the average vehicle turnover is quite high in case of companies decide to introduce new models every year.
  • Depreciation: A brand new luxury car depreciates typically by 10 to 12% as soon as it is bought. Over an ownership period of 5 years, the car loses nearly 50% of its value. Thus, few owners tend to sell the ride after using it for 3 years only to get the best resale value.
  • Insurance and warranty duration: Normally, at the time of purchase of a new luxury car, the insurance policy duration can vary between 3 to 5 years depending upon the ongoing offers by the dealership and the financing company or bank. Trying to sell the car within the warranty and insurance coverage period attracts better value for the vehicle and is also very convenient for the buyer.  

Why do luxury cars have very little resale value?

Luxury car manufacturers have to face renewed competition in recent years due to the increasing demand for such vehicles. In the Indian context, till 2010, and limited the extent of luxury car buyers to Tier I cities that house big corporates and international business hubs. The last decade has witnessed a newly kindled interest among Tier II and Tier III cities’ consumers. It has been possible through aggressive marketing campaigns by the manufacturers and to beat the competition by expanding the service center and dealership network.

As the demand is growing even in the used or pre-owned luxury car market, the manufacturers are rolling out newer upgraded models more frequently now. It has resulted in more pre-owned units on the roads to meet the existing demand and the future prospects. All these factors combined have resulted in the decreased resale value of the brand new luxury car. A detailed analysis produces the following conclusions:

  • Taxes and duties: Luxury cars come with a hefty price tag because of the taxes and duties imposed on them. Most of the luxury cars that we see in India are imported. Thus, the government policies dictate the pricing of these vehicles to a great extent. As a first buyer, the customers have to pay almost more than 55% of the vehicles’ actual cost, making it very pricy in the domestic market.
  • Depreciation Curve: Luxury cars lose almost 45% of their value in the first 3 years of ownership. As insurance is renewed, it further brings down the cost of the vehicles. Similarly, as the car exceeds the warranty period, the value of the pre-owned luxury car decreases further, resulting in an overall loss of 60 to 70% of the actual cost of a brand new luxury car.
  • Technical Advancements: As discussed in the preceding paragraphs, luxury car manufacturers are now rolling out more advanced vehicles at regular intervals within a short time span to keep the market and the consumers engaged. This means that as soon as a new model is launched, the preceding model loses half of its value almost immediately. There is an exception to SUVs and 4X4 vehicles because of their robust design and utility, but most luxury sedans suffer the highest depreciation owing to the above factors.

Conclusion

Owning a luxury car is like a dream come true for many car enthusiasts on the planet. These machines are no less than a work of art, and their significance transcends generations. For almost a century, the craze for these machines hasn’t lost its even a bit, and this is what makes them some of the most coveted possessions by people all over the world. While a used luxury car is a good bet any day, the decision should be carefully weighed. You can always conduct online research and talk to experts who have invaluable experience dealing with the sale and purchase of luxury cars. Stay in touch with us for more informative blogs on pre-owned luxury cars and future trends.

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