Even though new car sales slow down in recent past years but the sale of pre-owned cars is continuously increasing day by day. The pre-owned car Market continued to grow over the past year and is larger than the new car market now. This growth was driven in metro cities through a rise in online sales platforms such as Cardekho, Cars24, and Droom.
Based on the latest report of IndianBlueBook on the pre-owned car market, a used car pricing guide by Mahindra’s First Choice of Wheels. The growth rate of new car sales slowed down due to a variety of reasons, including a cyclic slowdown in auto sales in election years and overall consumption slowed down in the economy. New car sales grew 27.0% in 2018-19, the slowest growth rate of the automotive industry in the last four years.
Experts said that the slowing down in the sale of new cars could mean the demand is shifting towards the pre-owned car. Some car sellers replaced their old cars with pre-owned cars instead of buying new cars.
So what explains the preference for a used car? The IndianBlueBook report suggests that getting good value for money is the top reason among the reasons, why people prefer pre-owned cars over new cars.
Used Car Market to touch over 70 lakh sales by 2025
The pre-owned car Market in the country is expected to reach over 70 lakh vehicles by 2025-26, up from 38 lakhs in 2020-21 as covid -19 pandemic, digitalization, changing demographics, and aspirations, first-time buyers, and availability of financing options are acting as a growth factor in pre-owned car increasing sales.
First – Time Buyers
Apart from the Digital push, the Market has received a boost from first-time buyers who account for nearly half of all pre-owned cars sold in India. The share of first-time buyers expanded by 8 – 10% during FY21 in the backdrop pandemic, primarily due to the restricted availability of public transport and increased mobility of personal cars, increasing urbanization, and nuclearization are expected to provide further impetus to the need for personal mobility, therefore accelerating the demand of pre-owned cars, said the OLX -crisil report.
Why do people choose a pre-owned car over a new one?
The cost of a pre-owned car is less in comparison to a new car, mainly due to high depreciation, higher taxes RTO/registration fee, and expensive vehicle insurance policies, Grant Thornton said in a report. Small towns are expected to fuel this growth as the share of non-metro cities in a used car.
India’s pre-owned car market is 5th largest
The Indian pre-owned Market is the fifth largest in the world, the biggest being China, USA, Japan, and Germany, said consulting firm Redseer in a report. Currently, close to 5 million pre-owned cars are sold in India every year.
So, if you plan to sell your old car, take care of your car. If you are a buyer take help from online tools to research the used car first. Going to an organized Market helps you in two ways. First, the quality of care will be certified and your will also get a warranty. Second, If you need a loan to buy that car you find it easier to do so through an organized market.
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