Used Car Market Trends

Growth Drivers

• Widespread online platforms and operations: Rapid digitalization of dealership networks has increased sales in the market. The advancement in online platforms for buying and selling pre-owned cars has accelerated the transition. Ease in digital payment methods has brought convenience to the process. Further, it supports the changing consumer preferences by offering detailed mechanical insights. Companies are also encouraging online transactions by integrating digital solutions. For instance, in September 2020, BCA launched its new digital sales channel, Retail Ready. This platform offers 24/7 availability and live online auctions for direct listing and selling cinch retail eCommerce platform.
• Increased certification and financing options: Increasing demand for certified vehicles to obtain quality assurance is shaping the market. The CPO programs are helping to meet consumer expectations by conducting a thorough inspection of vehicle conditions. Financing facilities for buying pre-owned cars have also broadened the range of consumers with different economic backgrounds. Leasing and rental platforms are also feed-stocking the market with maturity-returned cars. For instance, in May 2024, Kia India partnered with ORIX Auto to launch its new ownership experience program, Kia Lease. This partnership will allow ORIX to access the returned or exchanged vehicles for reselling.

Challenges

• Fluctuating prices of used car: Price volatility is one of the major setbacks in the used car market. The uncertainty in pricing may complicate the negotiation process between sellers and buyers. Thus, consumers with financial limitations may refrain from the purchase or sale. The varying prices due to seasonality and changed supply-demand dynamics can create difficulty in determining fair market value. This can further result in extended holding periods, creating inconsistent demand.
• Competition with other transportation: The rise of shared rides and public transportation can reduce the demand in the market. This may hinder consumer interest in owning personal ownership experience. Sustainability concerns in the younger generation can also lead to a decline in personal vehicles, including used car. Rapid urbanization has increased the accessibility of public transport, diminishing the need for personal or pre-owned cars.