Mahindra and Mahindra’s concern First Choice Wheels is in a bid to have a truck with Syndicate bank for arranging loans against used cars @ 9percent interest rate. The move comes in the wake of the potential for the used cars in the country, which is dominated by the unorganized players. The problems that the prospective customers face are – improper documentation, delay in car transfer, poor quality of cars and other practical problems.
First Choice comes to the rescue of these problems in the pre-owned cars market in which the interest rates are at 16-17% fixed by the unorganized players. Only 10% are properly organized and the company is to concentrate on this base to start with lower interest. The current ratio of the pre-owned and new cars is 1:1 in India, which is 1:2 – 1:2.5 in the US.