Second-hand Car Market: Myth And Manipulation????

[kaushama]

We all have seen recent up going trend in second-hand car market! There is a big scarcity of vehicles in the market. Everyone wants to sell their cars for absurd prices.

Whats is the reason behind it?

Sale owners say people do not want to sell unregistered vehicles as the import tax is too much. Some even say, the tax is going to be raised contrary to popular belief that it would be brought down by the government. If the tax is going to come down prices should drop down. But we see a paradox. Again it does not follow any logic as it is the case for Sri Lankan car market.

Is this trend due to a myth created by car sale owners????

Lets discuss it here!

Edited April 26, 2010 by kaushama

[charitha19]

mahcang... in SL its always a manupulation... look at the EG8.. sometime ago that didnt have much of a second hand market.. but the car was still new.. but look at it now.. 18- eg8's sells for even 1 Million... its manipulation to the MAX... u can stll sell the old starlet for around 900,000... and people will still but it for the reputation that people have created...

in the case of mazda's and other makes.. the market is not kind enough.. so the prices are quite modest.. but some models are way better than thier equal toyota's or other makes..

what to do mate... u need to live with that.... but i do belive car sales have it worse....

[Sylvi]

mahcang... in SL its always a manupulation... look at the EG8.. sometime ago that didnt have much of a second hand market.. but the car was still new.. but look at it now.. 18- eg8's sells for even 1 Million... its manipulation to the MAX... u can stll sell the old starlet for around 900,000... and people will still but it for the reputation that people have created...

in the case of mazda's and other makes.. the market is not kind enough.. so the prices are quite modest.. but some models are way better than thier equal toyota's or other makes..

what to do mate... u need to live with that.... but i do belive car sales have it worse....

Sir,

I am not a car sales man entire last year many Used car dealers shifted instead of importing Japanese used Vehicles Srilanka Registered Vehicles to keep their business going.

I know one small time used Japanese Vehicle importer had not sold a single Vehicle for last three months.

Only few big time importers imported very few Used Vehicles from Japan cost was so high only a certain class of people was able to buy them.

We will have to be patient and see the new government what they will do for importing of Vehicles duty.

I remember form 1962 till 1977 free imports was allowed how people had to undergo difficulties without reliable Automobiles.

Wijesinghe

[kaushama]

Sir,

I am not a car sales man entire last year many Used car dealers shifted instead of importing Japanese used Vehicles Srilanka Registered Vehicles to keep their business going.

I know one small time used Japanese Vehicle importer had not sold a single Vehicle for last three months.

Only few big time importers imported very few Used Vehicles from Japan cost was so high only a certain class of people was able to buy them.

We will have to be patient and see the new government what they will do for importing of Vehicles duty.

I remember form 1962 till 1977 free imports was allowed how people had to undergo difficulties without reliable Automobiles.

Wijesinghe

Well! If that is the case, second-hand car market will crumble when Government reduce the taxes for below 1600CC. And further there is a possibility of them reopening tax-free imports for doctors and professionals again!

[isurujosh]

the biggest reason behind market prices going up is "banks". they have started to lend money freely again after the scares of a deep recession are fading. with the prospects for the sri lankan economy at large growing strong, i don't see any possibility of car prices going down unless the government is going to reduce motor taxes significantly, which i don't think anyway will happen.

[Ruslan]

Well! If that is the case, second-hand car market will crumble when Government reduce the taxes for below 1600CC. And further there is a possibility of them reopening tax-free imports for doctors and professionals again!

yep, there's rumor saying that Gov will issue permits again..

[rangerover]

yep, there's rumor saying that Gov will issue permits again..

Thats descrimination! most private sector employees contribute more in taxes to the governement. And the government argument that these are perks to government sector employees, because they earn lesser is not really valid. Because ppl in the private sector does not earn a pension, pays a higher tax on income etc. So i think, if permits are issued, it should be done in a similar way as before where, private sector contributions be taken in to consideration as well. But limit the annual tax contribution from 240,000 to may be 150,000 to qualify

[MkX]

Thats descrimination! most private sector employees contribute more in taxes to the governement. And the government argument that these are perks to government sector employees, because they earn lesser is not really valid. Because ppl in the private sector does not earn a pension, pays a higher tax on income etc. So i think, if permits are issued, it should be done in a similar way as before where, private sector contributions be taken in to consideration as well. But limit the annual tax contribution from 240,000 to may be 150,000 to qualify

[kaushama]

Well everything is a discrimination in Sri Lanka!

For example the salary structure for state professionals!

[mistaken_ID]

Thats descrimination! most private sector employees contribute more in taxes to the governement. And the government argument that these are perks to government sector employees, because they earn lesser is not really valid. Because ppl in the private sector does not earn a pension, pays a higher tax on income etc. So i think, if permits are issued, it should be done in a similar way as before where, private sector contributions be taken in to consideration as well. But limit the annual tax contribution from 240,000 to may be 150,000 to qualify

100% agreed

[Devinda_Z]

Thats descrimination! most private sector employees contribute more in taxes to the governement. And the government argument that these are perks to government sector employees, because they earn lesser is not really valid. Because ppl in the private sector does not earn a pension, pays a higher tax on income etc. So i think, if permits are issued, it should be done in a similar way as before where, private sector contributions be taken in to consideration as well. But limit the annual tax contribution from 240,000 to may be 150,000 to qualify

+1

[Rohnd]

What actions would take by Inland Revenue Department for politicians , who consumed many miliions probably billions for their luxary at last election ?

See , Many American Hummers are roaming in Sri lankan roads as a result. Many new Prados were seen which we never seen earlier.

Will they open Tax files for them .

The Commisioner of Inland Revenue - over to you!

Edited April 28, 2010 by Rohnd

[Watchman]

What actions would take by Inland Revenue Department for politicians , who consumed many miliions probably billions for their luxary at last election ?

See , Many American Hummers are roaming in Sri lankan roads as a result. Many new Prados were seen which we never seen earlier.

Will they open Tax files for them .

The Commisioner of Inland Revenue - over to you!

Machan, are you implying that politicians are running around town in Hummers and Prados because of the election? I highly doubt there's a correlation between the two..

[Madhu]

What actions would take by Inland Revenue Department for politicians , who consumed many miliions probably billions for their luxary at last election ?

See , Many American Hummers are roaming in Sri lankan roads as a result. Many new Prados were seen which we never seen earlier.

Will they open Tax files for them .

The Commisioner of Inland Revenue - over to you!

Wll said bro, but does Mr. commissioner member of AL?

[shanX]

Wll said bro, but does Mr. commissioner member of AL?

lol i was also wondering the same, maybe he isn't , else he might track us down and file taxes for our [not so expensive] cars too

But anyway yeah, a lot of Prados with unreg plates were running around election campaigners last few weeks

[xXx]

Sir,

I am not a car sales man entire last year many Used car dealers shifted instead of importing Japanese used Vehicles Srilanka Registered Vehicles to keep their business going.

I know one small time used Japanese Vehicle importer had not sold a single Vehicle for last three months.

Only few big time importers imported very few Used Vehicles from Japan cost was so high only a certain class of people was able to buy them.

Sylvi you are spot on. Current spike in prices is indeed due to the low supply of vehicles in the market. Majority of importers have simply given up bringing down vehicles due to the high cost and low demand. Therefore there's a huge demand for locally used/2nd had cars. Rumours of a possible tax reduction have done nothing but add more complexity to the current situation. Sellers want to cash in at a high price before prices come tumbling down if the taxes are reduced an buyers want to play the waiting game hoping for a tax reduction.

[xXx]

I'd like to add one thing for people who think car sale/importers are devils spawns. Whole strategy behind car sales back in the days was volume driven. Low profit margins high volume. Since of 2004 there's been an annual increase on import duty thus driving the market price beyond income rage of the middle class and sellers were left with no choice but to adopt a low volume high profit margin strategy. Spike in utility costs, bank chargers and interest rates, FX rates etc didn't help things much either. So stop thinking that car sales are trying to screw you over and rob your wallet. They are just trying to make some money under difficult conditions beyond their control.

[xXx]

But anyway yeah, a lot of Prados with unreg plates were running around election campaigners last few weeks

These vehicles don't necessarily belong to the politician. Most of these SUV's belongs to the businessmen who back these politicos (financially) plates are removed to hide the identity of the vehicle and the owner.

[kaushama]

I'd like to add one thing for people who think car sale/importers are devils spawns. Whole strategy behind car sales back in the days was volume driven. Low profit margins high volume. Since of 2004 there's been an annual increase on import duty thus driving the market price beyond income rage of the middle class and sellers were left with no choice but to adopt a low volume high profit margin strategy. Spike in utility costs, bank chargers and interest rates, FX rates etc didn't help things much either. So stop thinking that car sales are trying to screw you over and rob your wallet. They are just trying to make some money under difficult conditions beyond their control.

May be there is a point in this. But I do not see a reason for car market to suddenly shoot up within 2 months unless there is some other reason behind it!

[zerocool]

IMO the reason is, the government made it so that we can’t import anything older than 5 years. So importers had to bring new cars which are expensive because of the tax system. So people can’t afford the new cars going for the second-hand cars, hence there is a high demand.

So when there is a high demand everyone and their mother want to sell them for absurd prices.

Not only that, I can’t get my Celica because they don’t even sell that girl. Damn them all.

[isurujosh]

I'd like to add one thing for people who think car sale/importers are devils spawns. Whole strategy behind car sales back in the days was volume driven. Low profit margins high volume. Since of 2004 there's been an annual increase on import duty thus driving the market price beyond income rage of the middle class and sellers were left with no choice but to adopt a low volume high profit margin strategy. Spike in utility costs, bank chargers and interest rates, FX rates etc didn't help things much either. So stop thinking that car sales are trying to screw you over and rob your wallet. They are just trying to make some money under difficult conditions beyond their control.

you can't say the same thing about 2nd hand market dealers. now there are lot of small timers with nothing else but a bit of cash in hand and make millions a month out of the 2nd hand market. i know this quite well coz i was in the market recently both selling and buying a vehicle.

[Watchman]

you can't say the same thing about 2nd hand market dealers. now there are lot of small timers with nothing else but a bit of cash in hand and make millions a month out of the 2nd hand market. i know this quite well coz i was in the market recently both selling and buying a vehicle.

So your a millionaire now ah? shaaa!!!

we want a treat

[Sylvi]

Sir,

Government had issued a circular it is by B Wijretne Esq Commissioner general of Motor Traffic From 2010 May 3rd that their will be changes for registration of motor Vehicles no VIC WILL BE ISSUED MOST VEHICLES WILL COME UNDER DUEL PURPOSE VEHICLES.

LUXURY CARS REGISTRATION DIESEL OVER 2500 CC TAX WILL BE RUPEES 50000.00 petrol cars over 2000cc also same.

This CIRCULER is a three pages in Sinhala.

Wijesinghe

[isurujosh]

So your a millionaire now ah? shaaa!!!

we want a treat

i think you misunderstood my post. i was not being a dealer my self. i was just there in the market to sell my van that was in personal use and got a car for personal use. that does not warrant me to become a dealer. since i was looking into the market to sell and buy, both, i came across a lot of dealers.

[xXx]

IMO the reason is, the government made it so that we can’t import anything older than 5 years. So importers had to bring new cars which are expensive because of the tax system. So people can’t afford the new cars going for the second-hand cars, hence there is a high demand.

So when there is a high demand everyone and their mother want to sell them for absurd prices.

You are spot on. Simple economics really, no artificial manipulation (other than people's greed)