Economic Suicide: Poor Resale Tales

Resale value of a car matters too. Do a standard homework before buying a new car, so that you don't regret after. Here is the pity story of Mitsubishi Montero SUV.

Always remember this. Never miss to take note of resale value while doing homework for buying a new car. Otherwise, it may turn out to be an economic suicide some years down the line. Some may rebut me that why should we think about selling the car (sometimes latter) at the time of buying? “You buy, you drive, and you sell.. It’s as simple as that!”, “You take pleasure in and you pay for it”. It is valid that you cannot foresee the resale trend years after. Nor it is hard to compromise your dream car for some unclear market trends. But, you can prevent some apparent risks and liabilities by buying right cars or to be exact, by avoiding some cars. Hey come on, it’s your hard earned penny right?? 

Some may reject the idea of money loss, since they feel that it is logical to shell out for satisfaction. But money too matter, otherwise you could have gone for the next segment or a costly car. Let us consider one of the worst cases for study. A customer buys a brand new Mitsubishi Montero MT for an approximate on-road price of Rs. 55 lakhs in November 2010. After two years and four months, now he wants to sell it. The car has clocked around 60,000kms with no body damages other than few paint scratches. How much is the market ready to pay for the car?

My recent encounter with a deal to buy a used SUV took me to some appalling facts about the Montero in the used car market in Tamil Nadu. Montero sales was very marginal and thus very few are available for sales. Yet, their asking prices are ridiculously low. A 2010 MT model with an odo-reading of 70,000 to 1,00,000kms, first or second owner status with good maintenance records are bargained for around Rs. 9 lakhs. Owners find it difficult to sell their Monteros and wait for a longer time to get them sold. A used car market analyst warns that customers should not pay more than 8-9 lakhs for such a car since more maintenance nightmares are awaiting them.

To know more about the maintenance costs for a 2010 Montero, WagenClub contacted the Mitsubishi dealer in Chennai. We were told that the usual overall service for every 10,000kms averages around Rs. 15,000. A clutch-plate overhaul would easily cost you around Rs. 1.2 lakhs! A turbo-charger replacement would rob you more than Rs. 2 lakhs. You cannot swap the driveline timing belt for nothing less than Rs. 50,000. Headlamps, windshield, side mirrors, bumpers and other susceptible items are exorbitantly priced too. Pricing is not the sole horror. Your Montero would be waiting at the service center for repairs from a minimum of two days to two months! Every spares are to be ordered and takes ample shipping time. Montero is a CBU, remember that!

Now rack your brains about, the loss to the first owner is colossal. The initial buying cost of the car, periodic service costs, and insurance costs are high. Frugality is just decent, which bring a reasonable fuel cost for the drives. At the end of the day when he wants to sell the car in two years, he is sanctioned a very meagre resale price. He could have done a better homework while buying the car, he may have diminished his liabilities. He could have opted a Freelander 2 or a BMW X3, they could have offered him a better brand image and more satisfaction. A 2.4l auto C-RV can take pride for a stronger resale value. And Montero is not a car of those segment standards either; it is basically the next-generation Pajero with few luxury bits.

It is nothing short to an economic suicide by buying a Montero. So, I wish you would do a better holistic homework before buying a car, will you??