India Used Car Market By Vehicle Type (Hatchbacks, Sedans, Sports Utility Vehicles), Vendor Type (Organized, Unorganized), Fuel Type (Petrol, Diesel), & Region for 2024-2031
Published Date: August - 2024 | Publisher: MIR | No of Pages: 320 | Industry: latest updates trending Report | Format: Report available in PDF / Excel Format
View Details Download Sample Ask for Discount Request CustomizationIndia Used Car Market By Vehicle Type (Hatchbacks, Sedans, Sports Utility Vehicles), Vendor Type (Organized, Unorganized), Fuel Type (Petrol, Diesel), & Region for 2024-2031
India Used Car Market Valuation – 2024-2031
Consumer behavior is shifting towards shorter ownership durations and more frequent car upgrades. This predisposition contributes to a larger market turnover of cars, boosting the availability of high-quality second-hand vehicles. Thus, as people choose newer models more regularly, there is a continuous influx of pre-owned cars, driving the market size to  reach 135.15 Billion by 2031, surpassing a revenue of USD 47.05 Billion valued in 2023.
Scrappage initiatives improve the availability of used cars, resulting in cheaper pre-owned vehicle pricing. With a larger pool of automobiles to choose from, buyers have more bargaining power and can find better prices, making used cars more affordable to a broader spectrum of consumers enabling the growth of the market at a CAGR of 14.10% from 2024 to 2031.
India Used Car MarketDefinition/ Overview
A used car, often known as a pre-owned or second-hand car, is a vehicle that has had at least one previous owner. These vehicles are offered through a variety of channels, including dealerships, rental agencies, private vendors, and even auctions. A pre-owned vehicle, often known as a used automobile or a second-hand car, is one that has previously been owned by one or more retailers. These vehicles can be purchased from a variety of sources, including franchise and independent car dealerships, rental agencies, leasing companies, auctions, and individual sellers. Some dealerships provide fixed pricing, certified pre-owned automobiles, and extended service agreements to give buyers additional piece of mind.
Buying a used car rather than a new one is generally a more cost-effective option, with lower purchase and insurance expenses. Additionally, purchasing a used automobile helps consumers to become acquainted with various vehicle characteristics and gain driving experience. Buying a used car has various advantages, including cost savings, reduced depreciation, lower insurance premiums, probable warranty coverage, and fee transparency. This makes acquiring a used vehicle a viable option for many discriminating purchasers.
The price of a used automobile is normally determined by three factorsthe dealer’s retail price, the wholesale price, and the price set by private sellers. With the development of the internet, finding information about used automobile pricing has become easier than ever. Several websites provide comprehensive databases, allowing consumers to rapidly find used cars in their area.
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How the Increasing Middle-Class Population and Increasing Disposable Income is Surging the Growth of India’s Used Cars Market?
As India’s middle class grows and a large proportion of the population consists of young people with increasing disposable income, there is a growing desire for car ownership. However, buying a new car can be prohibitively expensive. As a result, pre-owned vehicles appear as an appealing choice, providing a more accessible path to realizing the dream of owning a car, especially among this demographic.
Used cars are significantly less expensive than new vehicles, which appeals to price-conscious consumers, particularly those starting in car ownership. The used automobile industry offers a diverse range of models and options to meet the demand for low-cost mobility solutions that appeal to a variety of tastes and economic restrictions. The availability of finance alternatives designed exclusively for used cars has increased significantly in recent years. This increased availability of used car loans plays an important role in democratizing car ownership by decreasing the financial barrier for a wider range of people. With improved access to financing, more people can now overcome the initial financial barrier to purchasing a vehicle, boosting demand in the used car market.
The used car market in India is witnessing a revolutionary transition towards increased organization, owing largely to the advent of Internet platforms and pre-owned vehicle shops. These platforms and businesses provide increased transparency with extensive vehicle information, comprehensive inspection services, and standardized pricing. The transition from a traditional fragmented market to organized channels increases consumer trust, speeds the purchasing process, and improves the overall shopping experience. As a result, it boosts confidence and demand in the used automobile market, so contributing to its long-term growth.
The emergence of new companies and brand variety in the Indian vehicle industry are changing the dynamics of the used car segment. The emphasis on strong aftermarket services and spare parts availability for fresh entrants not only increases competition, but also broadens the range of options available to discriminating customers. As a result, the used automobile market grows more active and dynamic, providing compelling choices to both established and growing automotive brands.
How the Lack of Uniformity and Limited Warranty Coverage is Hampering the Growth of India Used Car Market?
The lack of uniformity creates buyer concerns about car condition, unreported faults, and the possibility of odometer tampering. Such concerns dissuade some consumers from entering the used car industry, limiting its  total expansion. While financing alternatives for used cars are growing, obtaining loans for older vehicles remains difficult when compared to newer models. Higher lending rates and rigorous down payment requirements might make used automobiles unaffordable for some customers, limiting their capacity to purchase and contributing to slower market growth.
Second-hand cars usually have limited or no warranty coverage which hampers the adoption of cars. This uncertainty about potential repair expenses can dissuade prospective buyers. Furthermore, older used automobile models may have limited after-sales service options, which reduces their appeal to customers looking for dependable post-purchase support. Owning a used car may have a stigma in certain areas of Indian culture, with some people considering it as indicative of inferior value or status than owning a new vehicle. This social impression might impact consumer preferences and hamper the widespread adoption of pre-owned vehicles, limiting industry growth.
New cars in India depreciate rapidly, especially in the first few years of ownership. This depreciation trend may prevent potential used car purchasers who are concerned about the resale value of their vehicles if they decide to upgrade in the future, acting as a barrier to entering the used car market. The used automobile market is strongly reliant on the supply of pre-owned vehicles from the new car category. Any disruptions or bottlenecks in the supply chain that result in the limited availability of new car models might have an indirect impact on the diversity and alternatives available in the used car market, limiting its growth potential.
Category-Wise Acumens
How the Low Prices and Rising Gasoline Prices are Accelerating the Growth of the Hatchbacks Segment in India’s Used Car Market?
Hatchbacks have a lower starting price than other vehicle types, making them appealing to budget-conscious consumers and first-time automobile buyers. Their affordable price point enables a larger portion of the population to enter the car ownership market without breaking the bank. With rising gasoline prices and a greater emphasis on sustainability, hatchbacks’ fuel efficiency provides a compelling benefit. Their compact size and lightweight construction contribute to optimal fuel use, making them desirable to city dwellers looking for cost-effective mobility options.
Hatchbacks’ modest proportions make them ideal for traversing congested city streets and parking lots. Their nimble handling and ease of agility improve the driving experience, bringing convenience and flexibility to urban commuters. Hatchbacks from leading companies such as Maruti Suzuki, Hyundai, and Tata Motors have a reputation for maintaining a high resale value over time. This intrinsic value retention makes them a desirable investment for used car owners, providing peace of mind and long-term financial security.
Maruti Suzuki is one of the leading brands in the hatchback market, with models such as the Swift, Wagon R, and Baleno known for their dependability and popularity. Hyundai follows closely with models like the Grand i10 and Elite i20, which are noted for their combination of flair and functionality. Tata Motors also asserts its presence with models such as the Tiago and Nexon, which excite purchasers with their strong build quality and feature-rich interiors.
How the Lower Upfront Purchase Cost is Driving the Growth of Petrol Segment in the India Used Cars Market?
Petrol-powered vehicles have established dominance in the Indian used car market, owing to lower upfront purchase costs compared to diesel counterparts, lower overall maintenance costs, a smoother driving experience, and improved fuel efficiency in urban traffic conditions. Petrol cars are often less expensive than diesel vehicles. This affordability feature appeals heavily to budget-conscious used car buyers, making car ownership more accessible to a wider range of people.
These vehicles often have lower maintenance costs, making them an appealing option for used car purchasers looking to reduce long-term ownership costs. The simplicity of petrol engines and the availability of spare parts contribute to the overall affordability of maintaining petrol cars. Petrol engines provide a smoother and quieter driving experience than diesel engines, resulting in increased comfort and enjoyment for drivers and passengers. This smooth performance is especially important in urban driving environments where stop-and-go traffic is common.
Such vehicles perform better in city traffic scenarios, which is consistent with the prevalent usage pattern in urban India. The stop-start aspect of city driving favors petrol engines, which are more efficient at lower speeds and frequent accelerations, resulting in lower fuel consumption and cost savings for drivers.
Gain Access to India Used Car Market Report Methodology
Country/Region-wise Acumens
How the Fuel Prices and Infrastructure Surging the Growth of India’s Used Cars Market?
India favors sedans and SUVs due to longer travel distances and well-developed road infrastructure. Diesel cars’ larger market share thanks to their historical price advantage. Similar to metro cities, hatchbacks, and compact SUVs are in strong demand, particularly for urban commuting. Furthermore, there is an increasing desire for premium second-hand cars, reflecting a shift in aspirational and lifestyle preferences. Hatchbacks and compact sedans dominate the market, but SUVs are gaining popularity. Petrol vehicles dominate due to the emphasis on fuel efficiency and cheap operating costs, which aligns with regional preferences.
Price sensitivity influences the desire for inexpensive hatchbacks and older second-hand vehicles. While the organized market is still growing in some locations, there is a strong need for low-cost transportation solutions. Developed regions with higher disposable incomes have a greater demand for newer and more premium used vehicles, reflecting changing customer preferences and lifestyle goals. Growing urban populations in India create a demand for accessible transportation options, which fuels the appeal of hatchbacks and compact SUVs, especially in densely populated areas. The availability of well-maintained roadways influences demand for SUVs designed for long-distance travel, particularly in locations with extensive road networks.
Fluctuations in petrol and diesel prices influence purchasing decisions, with consumers frequently choosing more fuel-efficient options to save operational expenses. Scrapage rules and emission standards in various cities influence the availability and demand for certain types of used vehicles, with compliance being an important consideration for both sellers and buyers.
Competitive Landscape
The competitive landscape of the India used car market is evolving rapidly. Established players, online aggregators, and the unorganized sector are all vying for a share of this growing market. The focus on quality, transparency, convenience, and a seamless customer experience will be key differentiators for success in the times to come.
The organizations are focusing on innovating their product line to serve the vast population in diverse regions. Some of the prominent players operating in the India used car market include
- Car24
- Maruti True Value
- Mahindra First Choice Wheels
- Hyundai H Promise
- Toyota U Trust
- Ford Assured
- OLX
- Car Trade
- BMW Premium
- Honda Auto Terrace
Latest Developments
- In August 2021, Audi India announced its plans to increase the number of Audi Approved Plus showrooms from 7 to 14 by the end of 2021, which will support pre-owned sales as well as the 40-plus workshops around the nation.
- In August 2023, CarTrade Tech Ltd. paid INR 535.54 crore for OLX’s India business. In February 2021, CarDekho.com intended to open larger format stores in various Tier-1 and Tier-II cities across India.
Report Scope
| REPORT ATTRIBUTES | DETAILS |
|---|---|
| STUDY PERIOD | 2018-2031 |
| Growth Rate | CAGR of ~14.10% from 2024 to 2031 |
| Base Year for Valuation | 2023 |
| HISTORICAL PERIOD | 2018-2022 |
| Forecast Period | 2024-2031 |
| Quantitative Units | Value in USD Billion |
| Report Coverage | Historical and Forecast Revenue Forecast, Historical and Forecast Volume, Growth Factors, Trends, Competitive Landscape, Key Players, Segmentation Analysis |
| Segments Covered |
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| Regions Covered |
|
| Key Players |
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| Customization | Report customization along with purchase available upon request |
India Used Car Market, By Category
Vehicle Type
- Hatchbacks
- Sedans
- Sports Utility Vehicles
Vendor Type
- Organized
- Unorganized
Fuel Type
- Petrol
- Diesel
Region
- North America
- Europe
- Asia-Pacific
- South America
- Middle East & Africa
Research Methodology of Market Research
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