Used Car Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

Market Overview

The used car market was valued at USD 250 billion in 2020, and it is anticipated to reach USD 403 billion by 2026, at a CAGR of more than 10% during the forecast period.

The outbreak of COVID-19 and the subsequent shutdowns have affected the market in both ways, wherein the first half of 2020, the sales were affected by lockdowns, but the market witnessed huge growth in the latter part of the year.

The used car market across the world is growing rapidly. The main reason for the same has been the advent of organized players in the market in developing nations, which has taken care of the trust deficit, plaguing the used car market in those countries for ages.

Additional factors, such as a rise in income levels, increasing demand for luxury cars, shorter car ownership periods, booming import-export, and a growing preference of two-wheeler owners to upgrade to small and compact cars, drive the growth of the market.

However, a lack of financing or expensive financing options in many countries for used cars is expected to hinder the growth of the market. While finance for new cars is easy to obtain, used cars attract a higher rate of interest and are not sanctioned so easily. However, with the gradual growth in the organized sector, the market situation is changing. Major players, like Toyota, BMW, Maruti Suzuki, etc., have ventured into the used-car space in India.

The market in emerging economies such as India is currently dominated by unorganized players who do not own an inventory but rather thrive on their own platform for C2C sales. They make revenue through commissions earned by facilitating the sale of used cars on their online platforms. But slowly and steadily, the organized and semi-organized sectors are catching up and are expected to occupy a considerable sale towards the end of the forecast period. The Asia Pacific region is expected to be the largest market, followed by North America and Europe.

Scope of the Report

A used car, which is also known as a pre-owned vehicle, or a secondhand car, is a vehicle that has previously had one or more owners. The used car market is segmented by vehicle type, vendor type, and geography. The vehicle type includes hatchbacks, sedans, sports utility vehicles, and other vehicle types. The "other vehicle types" segment includes pick-up trucks and MPVs. The vendor type includes organized and unorganized. The report provides the market size of and forecasts for all the major countries in North America, Europe, Asia-Pacific, and Rest of the World. The profiles of major players in the market are also covered, along with their market shares. The market size and forecast are provided by value (USD billion).

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Key Market Trends

Strengthening of Online Infrastructure is Positively Affecting the Used Cars Market

As the smartphone and internet penetration in emerging economies, especially in Asia-Pacific, is increasing, the used car market is getting more organized because used car retailers are using digitalization to make market offerings attractive. Facilities such as an enormous number of photos and videos on the online platform and easy online instant finance service are drawing more customers into buying used cars.

In the North American market, where the used car sale to new car sale ratio is almost 2 to 1, many new players such as Fair and Vroom are using artificial intelligence and big data analytics to differentiate their brand and offerings from conventional used car dealers. Major OEMs are now investing in the used car segment to ramp up their revenues.

Tech-savvy customers in the age group of 25-40 years are demanding features such as end-to-end transaction, doorstep delivery, digitalized recommendation on the basis of driving behavior and lifestyle of customer and digitalized test drives. Players in the market are providing flawless and smooth access to car specifications, performance reports, and inventory information to customers to assist them in making informed decisions.

Mercedes-Benz is using blockchain technology to store and maintain the maintenance history record of the carbon footprint of used cars in Beijing. 35% of a car’s carbon footprint comes from the manufacturer. Mercedes-Benz and PlatON are planning to store the entire lifecycle data of a vehicle.

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