Used car market in India revving up. What's fuelling this growth?

The used car market in India has witnessed rapid growth in the last few years owing to multiple factors and at times giving the new car market a run f
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Cars
The used car market in India has witnessed rapid growth in the last few years owing to multiple factors and at times giving the new car market a run for money with a higher growth rate. (REUTERS)
Cars
The used car market in India has witnessed rapid growth in the last few years owing to multiple factors and at times giving the new car market a run for money with a higher growth rate.

The Indian passenger vehicle market is growing at a rapid pace. With the renewed focus on personal mobility since the outbreak of the Covid-19 pandemic, the Indian passenger vehicle market is witnessing a massive surge in consumer demand. At the same time, various factors such as inflation, rising cost of raw materials, economic crisis, and insecurity around jobs have been putting pressure on consumers. Weighing in the need for personal mobility and such challenges, consumers are shifting their focus to used or pre-owned cars.

While new car sales still remain the benchmark of growth for the passenger vehicle market, used cars are giving the new models a run for money. Challenges like the rising cost of ownership for vehicles, sky-high fuel prices, preference for personal mobility at an affordable cost etc are fuelling the growth of the used car market in India. Interestingly, at some point, India's used car market growth pace is surpassing the growth rate of new passenger vehicle sales as well.

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The Indian consumers who at some point were sceptical of buying used products, especially large ticket items like cars have been showing great interest in buying pre-owned models. This significant shift in consumer preference has propelled the growth of the segment and pushed many OEMs to launch their dedicated pre-owned car-selling vertical, which includes Maruti Suzuki's True Value, Mahindra's First Choice etc., among others. The organised and unorganised players in the segment are making this segment ever-dynamic. In a nutshell, while the allure of a brand-new shiny car still remains undeniable, here are some reasons why consumers are making the used car market in India a rapidly bulging marketplace.

Affordability is the key

Affordability is the key driver behind the growth of the Indian used car market. While new car sales have surged significantly, their prices too have shot up drastically, making it difficult for many buyers to purchase and own a new car. On the other hand, a little bit of research in the market can result in a good deal for the buyer with a used car. A used car offers substantial cost savings and at a time of economic uncertainty, it comes with a great value proposition.

Quality boosting consumer morale

Quality of the modern cars has improved significantly in the last few years. Technological advancements have resulted in superior build quality, new features and longer lifespan for modern cars. This has enhanced the morale of the consumers to buy used cars as they come promising similar quality as the new ones. As many consumers seek to upgrade their vehicles with newer models, the older cars that come with pretty good quality and a wide range of advanced tech are grabbing the attention of buyers.

Convenience similar to new car buying

Modern consumers' buying habits have evolved drastically from even a decade ago. The consumers now prefer to have served all the facilities to them instead of picking things from different places. The organised used car selling platforms have been offering them this advantage, eventually propelling the growth of the segment. Several used car selling platforms have been offering test drive opportunities, attractive offers and discounts, guaranteed buyback schemes, doorstep delivery, and bundled offers like name transfer, registration, insurance etc., which means the consumer of a pre-owned car doesn't need to visit different places to get these services. These have been increasing the reliability of the used car market to buyers.

Rise and increased penetration of internet

While the OEMs have been offering the online car buying experience to their consumers, the used car market too is seeing ever-increasing penetration of the internet. Consumers can browse multiple cars, their advantages and disadvantages listed by the used car selling platforms with proper and detailed images and videos, which increase reliability. Also, booking a test drive, payment of the booking amount and purchasing the car - everything can be done online from the comfort of the buyer's drawing room. This convenience too has been fuelling the growth of the used car market in India.

First Published Date: 07 May 2024, 12:27 PM IST
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