In the wake of demonetisation move, car dealers are saying that sales of used car have been hit hard by the cash crunch in market.
The demand for used car has been dropped by 30 percent after the announcement of demonetisation, Times of India reported.
As the user car market is unorganised and only 20 percent vehicles are financed, the cash crunch has impacted it more than the new car market.
“The used car market has been very badly affected and right now the transactions are almost nil. More than 70% of used vehicles sell on cash, and for this huge segment, the entire game has changed overnight,” Times of India quoted Ashok Khanna, senior executive vice-president of HDFC bank, as saying.
The demand is expected to be normalized by January. Almost 55 percent of used scar sales came from non-metro customers.
According to CarDekho.com, an online portal for finding deals on new and used cars, 70% of new cars are bought with an auto loan. But less than 15% of the used car buyers end up financing their car due to issues in getting a loan for it, Live mint reported.
However, online car traders said that the move might benefit them as the used car markets will be organised and transparent post demonetisation.