The used car market in India is improving. What is fueling this growth?

While new car sales are still a measure of growth for the passenger vehicle market, used cars are giving new models a run for their money. Challenges like rising cost of vehicle ownership, skyrocketing fuel prices, choice for personal mobility at affordable cost etc. are driving the growth of the used car market in India. Interestingly, at times, the growth rate of India’s used car market has even outpaced the growth rate of new passenger vehicle sales.

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Indian consumers who were once skeptical about buying used goods, especially big ticket items like cars, are showing great interest in buying pre-owned models. This significant change in consumer preferences has fueled the growth of the segment and forced many OEMs to set up their dedicated pre-owned car dealerships, including Maruti Suzuki’s True Value, Mahindra’s First Choice, etc. Organized and unorganized players in the segment are making this segment ever dynamic. In short, the allure of a brand new shiny car is still undeniable, here are some of the reasons why consumers are making the used car market in India a fast growing market.

Affordability is the key

Affordability is the main driver behind the growth of the used car market in India. While sales of new cars have increased significantly, their prices have also increased drastically, making it difficult for many buyers to purchase and own a new car. On the other hand, a little market research can help a used car buyer get a good deal. Used cars offer significant cost savings and come with a great value proposition in times of economic uncertainty.

Quality that boosts customer morale

The quality of modern cars has improved significantly over the last few years. Technological advancements have led to better build quality, new features and longer lifespans for modern cars. This has boosted the morale of consumers to buy used cars as they promise the same quality as new ones. As many customers want to upgrade their vehicles with newer models, older cars that come with a better quality and a wider range of advanced tech attract the attention of buyers.

Same convenience as buying a new car

The shopping habits of modern consumers have evolved a lot from even a decade ago. Customers now prefer to have all the features instead of picking things from different places. An organized used car sales platform offers them this advantage, which ultimately drives the growth of the segment. Some used car selling platforms are offering test drive opportunities, attractive offers and discounts, guaranteed buyback schemes, doorstep delivery and bundled offers like name transfer, registration, insurance etc., which means consumers of pre-owned cars. To get these services one needs to visit different places. This adds credibility to the used car market for buyers.

The rise and growth of the Internet

While OEMs are offering their customers an online car buying experience, the used car market is also seeing continued growth of the Internet. Consumers can browse multiple cars, their pros and cons, listed through the used car selling platform with appropriate and detailed images and videos, which adds credibility. Also, booking a test drive, paying the booking amount and purchasing the car – all can be done online from the comfort of the buyer’s drawing room. This facility is also boosting the growth of the used car market in India.

Date of first publication: 07 May 2024, 12:27 PM IST