The Booming Used Car Market in India: A Look at the Factors Driving Growth

The used car market in India is experiencing a significant boom, with sales expected to double from the current 5.1 million units annually to over 10 million units annually by FY2028. This growth is even more impressive when compared to new car sales, with used car sales already surpassing new car sales by a million units in FY2024.

Car&bike recently released the sixth edition of its Indian Blue Book for FY2023 in partnership with Das Welt Auto, the used car business of Volkswagen India. This collaboration highlights the increasing importance and potential of the used car market in India.

One of the key factors driving the growth of the used car market in India is the rising disposable income, a young population, shorter vehicle replacement cycles, and increasing preference for personal mobility. Additionally, the market is becoming more formal and organized, with a shift towards organized markets gaining momentum. This shift is attributed to the better experience, professional setup, easier financing, better transparency, and quality assurance offered by the organized sector.

The GST rate on used cars also plays a significant role in encouraging more people from the salaried class to opt for a used car purchase. With lower GST rates on used cars compared to new cars, coupled with the high rate of depreciation, buying a used car is becoming a more attractive and viable option for many consumers.

In conclusion, the Indian used car market is poised for exponential growth, driven by various factors such as rising disposable income, changing consumer preferences, and the increasing formalization of the market. With the potential for further growth and development, the future looks bright for the used car market in India.