Buying a used car with your smartphone!

Purchasing a car is not only a matter of pride, but also one of the most important investments for the average Indian family to make; second only to owning a home. Factors such as budget, brand, vehicle type, fuel type, etc., usually top the list of factors. But there is one factor which supercedes most of the above parameters – type of ownership.

For many, buying a brand new car is a status symbol and they consider buying a used-vehicle as a downgrade. However, findings of a survey show that many Indians are now flocking to the used-car market like never before. The used-car market is now huge in India and with sales of 32 lakh units every year, higher than the new car market. It is likely to see a 300-per cent growth by 2020, according to a survey conducted by Google in association with Mahindra First Choice. The rise in used car sales comes at a time when new vehicle sales growth is very sluggish. At present, there is a used car sold for every new car and the ratio could go up to 1:2 within the next five years.

And the majority of the activity, unsurprisingly, is happening online. Growing demand for used cars is witnessed by the growing number of searches on Google. The survey says there has been a whooping 20 times increase in online searches since 2008, and there has been an exponential growth in the number of websites catering to the used-car market. Like all internet users, used car buyers are also seen to be reaching into their pockets for their smartphones. Used car query share on mobile devices grew steadily to 37 per cent in 2014, up from just 2 per cent in 2008. But the good old desktop is still king, accounting for the remaining 67 per cent. However, with growth in smartphone technology, we can see the ratio skew back in favour of handheld devices in the future.

The segment, however, is largely unstructured. Only 15 per cent of the used-car market is currently estimated to be organised. A major chunk of the activity, 60 per cent, happens directly between the buyer and seller and the remaining one-fourth is unorganised. The survey estimates the organised sector will increase its market share to 21 per cent within the next five years.

After deciding to purchase a used vehicle, the user seems to encounter a roadblock; the choice of brand. For every branch search on Google, there are at least five generic searches.

What drives a family to buy a used vehicle? The survey points at affordability (35 per cent) and value for money (29 per cent) as the top catalysts. Around 20 per cent of used vehicles are bought to supplement existing cars in the household and the least popular reason to own one is ‘teaching a family member how to drive’.

Demographic breakup of the segment shows the southern parts of the country dominating used-car searches. Maharashtra seems to be generating the most interest while Gujarat, Assam, Bihar, Jharkand throw up very few results.

When it comes to type of vehicle, SUVs seem to have the biggest online presence accounting for 47 per cent of traffic. Luxury and mid-size cars account for 9 per cent each, while mini vehicles (hatchbacks) account for 13 per cent.

Even though petrol is still many Indian family’s first choice of fuel type, nearly 34 per cent of potential buyers in 2014 looked for diesel vehicles with used diesel car searches rising 2.5 times between 2011 and 2014. However, with Delhi being asked to ban all diesel vehicles older than 10 years by the National Green Tribunal, this statistic could again tip in favour of petrol vehicles, at least in the national capital and surrounding regions.

While there seems to be a growth in interest for used cars, there is also low awareness among users with respect to warranty. Almost no searches on Google had warranty and certification as keywords. This is possibly a direction in which the market could evolve and improve in the coming years.