Future Market Insights
Used Passenger Car Sales Market: Snapshot
Sales of used passenger cars have been witnessing rapid rise pushing the market on high-growth trajectory. On the other hand, sales of new passenger cars in recent years have significantly slowed down. One of the compelling propositions spurring the demand for used passenger cars is the increased proclivity of people to own a car and get it at affordable prices. Especially compact and even mid-sized cars have seen uptick in demand fueled by the concerns of affordability. These cars have lower price points, making them attractive for people who don’t have cars to own one. Another factor that might have played crucial role in the booming growth of the market owing to spike in prices of new passenger cars. Additionally, rising crude oil prices has also been key enabler of demand for used passenger car sales.
The used passenger car sales have been fueled by a few macroeconomic trends and microcosmic factors. A case in point is the emergence of passenger cars sold on franchisees. This is gathering steam among cost-sensitive markets. Complementing this, there has been a perceptible rise in off-lease vehicles. However, there is high competition from the demand for utility vehicles. The entry of organized players in the used passenger cars market has further expanded its potential by increasing value proposition of cars. Adoption of new technologies that enable players to test used passenger cars for quality and reliability is a key factor bodes well for the market, as the process enhances the value of cars and helps in promoting trust
Easy availability of finance, and rising income level have made it easy to buy a new car. Despite this, used passenger car sales is anticipated to grow at a relatively high rate as compared to new passenger car sales, owing to factors, such as growing number of certified used car sellers, improved life of used cars, competitive pricing, availability of various finance and insurance options, warranties, etc.
The used passenger car sales market has changed over the past few years. It is growing at a fast pace due to increasing population, rising income level of people, and the availability of a wide variety of cars in the market. In old days, there were no organized players in the used passenger car sales market, due to which majority of sales was through unorganized players and directly, between consumer to consumer. Many organized players have now entered the used passenger car sales market and they have earned trust amongst their buyers. As new car purchasers have the option of exchanging their old car for a new one, a variety of options are now available in the market. Used cars are checked thoroughly and are renovated by skilled labour, so as to provide better value. This gains trust and satisfaction amongst buyers, which in turn increases used passenger car sales. The used cars market is now structured and organized, due to which used passenger car sales is expected to grow.
Key Drivers, Trends, Restraints
There are various factors driving the used passenger car sales market, such as easy and simple options for loans, and the growing demand from the new generation, who have a tendency to change cars within two to three years. People want new technology at a less price, which is fulfilled by a used car.
Various other factors responsible for used passenger car sales are:
Improved quality of used cars:
Due to technological advancements, the quality of cars has been improved over past few years. The quality of material used in the car has been improved, due to which the average life of a car has increased. This has fueled the growth of used passenger car sales. At the time of resale, the seller carries out a multipoint checking of the car, so that the customer gets good quality at a less price. Attributing to this, the trust factor between buyers and sellers has increased and it is driving used passenger car sales.
As most families have more than one car, the use of one car is relatively less as compared to the other one. Also, the car is well maintained and these are the cars which are to be bought, as they offer excellent value for money. This is another factor responsible for increasing used passenger car sales.
Growing organized players in the used passenger car market:
Used passenger car sales is increasing over the past few years through organized players. These players provide better service and value for money to the customer, as compared to unorganized players in the market. They provide buyers with a wide variety of used cars to choose from. Cars that are available with these players are certified by quality engineers. Due to this, the risk of buying low quality used cars has been reduced drastically. Organized players have helped make the used car market more transparent and ensured fair prices for both, sellers and buyers. This has contributed to increasing used passenger car sales globally.
Online portals and internet access:
With easy availability of high speed internet, people are able to sell or buy used cars through various online portals. Due to this trend, search cost has come down and this has made a positive impact on the used passenger car sales.
Though used passenger car sales is growing, there is always a risk factor involved in buying a used car. This is mainly due to unorganized players that are not authorized by the government. Also, the trust factor has not been built completely between buyers and sellers, regarding the quality of the used car. The absence of knowledge of the history and quality of a used car is a restraining factor for used passenger car sales.
The global used passenger car sales market can be segmented on the basis of vehicle type, dealer type and fuel type.
On the basis of vehicle type, the global used passenger car sales market is segmented as:
On the basis of dealer type, the global used passenger car sales market is segmented as:
On the basis of fuel type, the global used passenger car sales market is segmented as:
Examples of some of the market participants in the global used passenger car sales market, identified across the value chain include:
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