The fact that one of the pillars of the Indian GDP – the automotive sector – is going through its worst phase is no secret. The slumping economy had already put brakes on the sector while the COVID-19 pandemic has further flushed its chances of revival in the second quarter of the financial year. With everything in lockdown, auto sales have fallen completely flat. Not to mention how the transition of BS4 to BS6 emission norms has further added fuel to the fire.
The second-hand car market has also followed a similar pattern. Will people buy used cars or new cars after the lockdown ends? Auto dealers are anxiously looking forward to the answer. Here’s a deeper look into this:
A silver lining in the lockdown
Although the COVID-19 pandemic has led to the auto sector facing huge losses, post lockdown, things might just turn the tide. It isn’t a shot in the dark. With social distancing being practiced everywhere, even after the lockdown ends, people would be reluctant to travel in buses, metros and other public transport for fear of the spread of the virus through the crowd. Moreover, the usage of shared cab services is likely to nosedive as passengers would avoid going in a car that might have been used by an infected person.
People would hence look for a private car as the best solution to move from one place to another. As per some surveys, many two-wheeler owners are mulling over going for a second-hand car, even if they have to buy used cars on EMI.
Used car loan to go up
The resurrection of the auto sector in the used car market is likely to foster its focus on the sub-10 lakh cars. The financial institutions offering used car loan would also witness a J-curve, thanks to the plethora of users who are bound to be inquiring about a loan for used cars.
The metros, in particular, are likely to see a surge in the application for such loans owing to higher salaries and daily commute of the citizens. As per the survey conducted by CARS24, most consumers who were earlier using cabs for transportation are now contemplating to go for private cars.
Additional Reads: Top Benefits of Used Car Loan
Pre-owned car business to boom more than the new car
With salary cuts and lay-offs inevitable post lockdown, car buyers have reduced their budget with some preferring used cars instead of new ones. People who wanted to buy a car without a loan on used car are also refraining from using up all the money in the car at once. Instead, they are figuring out the affordable used car loan interest rate, which could help them save a fair amount of money.
Understanding the forthcoming challenges in commutation after the lockdown, Tata Capital stands shoulder-to-shoulder with the used car buyers looking for a second hand car loan with its attractive interest rates on a used car loan. Reach out to them to fund the purchase today.