Money
Used vehicle market a boon for customers
For those looking to buy a four-wheeler, the second hand market is an extremely viable alternative to buying a brand new vehicle. Buying a new car generally costs an arm and a leg in Nepal thanks to the insane taxes imposed by the government on vehicles while importing them.Krishana Prasain
For those looking to buy a four-wheeler, the second hand market is an extremely viable alternative to buying a brand new vehicle. Buying a new car generally costs an arm and a leg in Nepal thanks to the insane taxes imposed by the government on vehicles while importing them.
Combined with the rapidly deteriorating roads in the country, used vehicles can be seen as a bargain.
According to used vehicle shop dealers, a new vehicle loses nearly Rs700,000 in value after the first year and depreciation tapers off the older the vehicle gets.
Though there is no exact data regarding the market growth of the used vehicle industry, shop owners said that the market has been growing at a solid 5 to 10 percent annually. The growing number of sales in the used vehicle segment is due to the expanding vehicle market, availability of financial services, increasing disposable income, road expansion projects and the sheer necessity to own a four wheeler.
Having your own four wheeler allows one to avoid the chaotic public transport options while having the freedom to go anywhere, anytime. And people are buying used vehicles that cost anywhere from Rs1.5 million to Rs 4 million, said Sadhu Ram Dhakal, sales officer at Nepal Wheels. He added that the depreciation of a vehicle varies according to its brand, model, re-sale value and availability of spare parts.
The company sells over a dozen used vehicles a month.
Sachit Kunkel, manager at Kathmandu Automobiles Center said four wheeler enthusiasts in the country want the latest and greatest new models, and constantly update their vehicle of choice, providing the used market with a steady supply of cars. He said that some even sell their vehicles when they encounter financial hardship or plan to go abroad.
His shop sells nearly 20 units of used vehicles a month. According to Kunkel, customers prefer to buy a used hatchback.
Banks are also enabling the used vehicle market by providing financial services on the purchase of such vehicles. Nabil Bank and Standard Charted Bank have been providing financial services for customers looking to buy a used vehicle. Nabil Bank provides finance facility of up to 50 percent of the used vehicle’s valuation while Standard Charted Bank provides financial service on the basis of vehicle age not exceeding eight years from the final repayment of loan.