When CarToq member Rahchand Pillai observed that there appear to be plenty of Mahindra XUV500’s in the used car market already, it got us thinking, and we decided to check out if this is really so. Was it that owners were not happy with the XUV for some reason or were people trying to cash in on the hype?
CarToq expert Roshun Povaiah says, “Many people are cashing in on the demand for the XUV. Of those who got lucky in the draw in February, many are actually dealers / brokers who booked the XUV, knowing that there will be a premium on them. I know a person who is buying one this way paying a Rs. 70,000 premium. That’s why so many in the second hand market, but they are selling for more than their ex-showroom price. It’s big business.”
However, CarToq expert Aravindhan counters this view saying, “I don’t think the XUV500 has reached the used car market only because of this ‘business’. We have to wait for a couple of more months to know the actual problem. Given the customer sentiments in India, even if a person is crazy about XUV500, he will think twice about buying a used XUV500.”
Aravindhan has a point. So CarToq decided to look through some listings for the XUV500 in the used car market and see what the reasons were. Surprisingly, most of the XUV500’s that are for sale in the used-car market haven’t even clocked over 5000 km. This means they are brand new and have not even been through their first service.
CarToq expert Babychen Mathew points out there were many small usability issues with the XUV500 in the past six months and that owners may be getting rid of them after the initial fascination wore off. That’s a valid point too, as CarToq has heard of small issues with the music system, some electronic niggles with the central locking, cruise control and even some suspension issues – but nothing really serious or faulty across the board among XUV500 owners.
And then three things caught our attention among the used car listings. One, most of the listings were by dealers and not individuals. Two, many of the XUV500’s that were listed were under a 1000km or some hadn’t even been driven for a few KM – meaning they are brand new. And three, and this was the most revealing fact – almost all the listings commanded a premium of Rs. 25,000 to Rs. 65,000 over the equivalent ex-showroom price for a brand new XUV500. The less the car was driven, the more the premium!
So while some individuals were selling it off at equivalent showroom prices, others were asking for a big premium. This leads us to believe that dealers and individuals are actually trying to cash in on the demand for the XUV500 and have actually driven up prices – making the XUV500 command a premium over its actual price!