By Nauman Tasleem
LAHORE: The prices of secondhand cars have started increasing because of tightening of banking policy for the auto finance, Daily Times learnt here on Saturday.
There have been a slight increase yet but the automobile dealers said that the prices of secondhand cars would rise further in future. They said that the banks have tightened the finance facility and it was a major reason in the rise.
The latest figures released by Pakistan Automotive Manufacturing Association (PAMA) also said that the sales of new cars have fallen. The car dealers said that in the past people used to buy secondhand cars because of non-availability of finance for the new cars.
"People had no option but to purchase secondhand cars but as soon the banks introduced auto finance facility, the customers got attracted towards new cars and demand for used cars declined," said Mukaram Khan, a dealer of Jail Road.
He said that as soon the banks introduced the auto finance facility, one having Rs 70,000 went for buying a new car. "The demand for used cars went down," said Khan. He said that the terms and conditions of the banks were not hard to meet and the customers through the banks purchased a large number of new cars. He said that it dented the demand for old cars and seldom people buy used cars.
However, he said, now the scenario is changing, as the banks have tightened the auto finances and once again the secondhand cars are coming into demand. He said that the prices of small cars have seen increased while saloon cars have not become that expensive.
"The major effect has been seen on the small cars including 800 and 1,000 CC cars," said another car dealer Ausaf Afzal adding that around Rs 8,000 to Rs 10,000 has been added into the price of 800 or 1,000 CC cars.
"Though the price is dependent on model and condition of the car but now the cars whose prices were earlier around Rs 150,00, now available for Rs 160,000," Afzal said adding that one can say that there is an increase of 6 percent. He said that the dealers were expecting the prices would increase in the coming days, as the availability of new cars would decrease while the demand of customers might remain stagnant. "A number of dealers are now thinking of purchasing secondhand vehicles for future investment," said Afzal.
Pakistan automotive industry witnessed a boom during the last six years, as the production has increased around four times. The PAMA figures revealed that in 2001-02, around 44,378 cars were sold while 42,679 were produced. The industry was at its peak in 2006-07 when it produced around 176,016 cars while it sold 180,834 cars. However, the banks started tightening the auto finance facility because of certain reasons.