Growing reluctance to shared travel post Covid has boosted the used car market in India, with a 10 per cent CAGR, according to Gajendra Jangid, co-founder of auto-tech company CARS24.
“We are expecting this growth to continue for the next five years, as the used car market underwent a paradigm shift, from unorganised to organise, in terms of sales,” he told BusinessLine. In the US, four used cars sell for every new car, while in India it is 1.6, he said.
The used car market in India is estimated at ₹1.5 lakh crore with five million sales last year. This indicates used cars outsold new vehicles, he says, adding that trust, transparency and convenience are the contributing factors.
Tier II, III cities are the growth pockets for used car sales, he says. “We expect that the growth in the next five years will be from smaller towns.”
Jangid attributed the rising demand for used car ownership to a booming economy, aspirations, affordability, organised market, and the long waiting period and surging prices of new cars. Earlier, customers hesitated to opt for used cars due to uncertainties over pricing, quality, financing, and post-sale support. All of these issues have been addressed, especially with the rapid transformation of the sector into an organised market, he said, adding that the company, which has received an NBFC licence, is also offering finance for car purchase.
Kerala, according to him, is among the top five states for pre-owned car sales, witnessing a 370 per cent increase injust 90 days to surpass the figures from the corresponding period last year. Another interesting trend is that women constitute 50 per cent of the customers, he said, adding that attractive financing offers and flexible repayment options are driving demand.
CARS24 currently operates in more than 100 cities and aims to double the number this year.