The used car market deals in selling pre-owned or previously owned vehicles. Used vehicles are generally vehicles that have been registered under a previous owner's name or driven for a certain number of miles. The key advantages of used cars include lower purchase price compared to new vehicles, various makes and models to choose from and demand for budget-friendly transportation options. As people are preferring private vehicles over public transportation amid the COVID-19 pandemic, the demand for affordable used cars has increased significantly. The Global Used Car Market is estimated to be valued at US$ 1.78 Tn in 2024 and is expected to exhibit a CAGR of 6.3% over the forecast period 2024 To 2031.
Key Takeaways
Key players operating in the Used Car Market Growth are Arnold Clark Automobiles Ltd., Asbury Automotive Group Inc., AutoNation Inc., Autotrader, AutoScout24, Universal Motor Agencies, CarMax Inc., Carvana, Cox Automotive Inc. (Autotrader), Emil Frey AG, Group 1 Automotive Inc., Inchcape Group, Lithia Motors Inc., CarMax Business Service LLC, Asbury Automotive Group, AutoNation Inc., eBay Inc., Big Boy toyz, VROOM, Others. The growing demand for affordable vehicles and easy availability of vehicle financing options have boosted the used car market. Various technologies such as AI, machine learning, block chain etc. are being utilized for online vehicle listings, pricing, vehicle history reports and digital retailing which is improving customer experience.
Market Trends
The used car market is witnessing rising popularity of online used car sales platforms as people are now researching and purchasing vehicles digitally from the comfort of their homes. This has boosted online used car listing sites. Another key trend is the growth in used electric vehicle segment. As EVs are becoming popular with falling battery costs, incentives and rising fuel prices- the used EV segment is emerging as a lucrative opportunity especially for budget buyers.
Market Opportunities
One of the key opportunities for used car sellers is the strong growth projected in the used luxury car segment globally driven by rising affluence. Enabling favorable leasing options and financing for used luxury cars can help tap this opportunity. Secondly, the increasing preference for subscription-based used car ownership models especially among urban youth is opening new growth avenues for players.
Impact of Covid-19 on Used Car Market Growth
The used car market witnessed significant challenges due to the COVID-19 pandemic. Social distancing norms and lockdowns implemented globally led to decline in new car sales. This forced many individuals as well as fleet owners to sell off their vehicles in the used car market, increasing inventory levels. However, with decline in demand and economic uncertainty, used car prices dropped substantially during the initial months of the pandemic in 2020. This made it difficult for dealers and individual sellers to get fair resale prices. The market started recovering in late 2020 with gradual opening up of economies. Wide availability of online shopping options and virtual vehicle showrooms helped boost sales. The demand further increased in 2021 as mobility restrictions were eased in many countries. Many consumers preferred to purchase used vehicles over new ones due to financial constraints caused by the pandemic. Overall, the market has regained momentum and is expected to demonstrate strong growth over the forecast period. However, pandemic-related uncertainties may continue to impact market expansion to some extent.
West Europe Dominates Global Used Car Market
The used car market in West Europe accounted for the largest share globally in terms of value in 2024. Countries such as Germany, UK, France, Italy has strong presence of used car dealers. The individual ownership of vehicles is high in these countries due to developed transport infrastructure and high per capita income levels. West Europe is home to leading OEMs and has well-established aftermarket channels for used vehicles. Consumers regularly sell their cars and upgrade to new models. The strong presence of both offline and online sales networks helps generate robust demand. Moreover, the preference for used luxury vehicles is high among consumers. However, the Asia Pacific region is emerging as the fastest growing market as countries like India and China are witnessing rapid growth in vehicle parc along with increasing inclination towards pre-owned vehicles.
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