Used Car Market Size, Share & Trends Analysis Report By Vehicle Type (Hatchback, Sedan, SUV), By Fuel Type (Petrol, Diesel, Others), By Distribution Channel (Franchised Dealer, Independent Dealer, Others (Private Sales, Offline, Online)), By Size (Mid-Size, Compact, SUVs) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2022-2032

Market Overview

The global Used Car market size was valued at USD 1580 billion in 2023 and is projected to reach a value of USD 3545.20 billion by 2032, registering a CAGR of 10.63% during the forecast period (2024-2032). The increase in Used Car market share during the forecast period is related to high vehicle prices and affordability concerns.

 A used car is a vehicle that has been previously driven but is still in functional order and is intended for resale. Used cars are available for purchase at a variety of outlets, including franchise and independent car dealers, rental vehicle companies, auctions, private party sales, and leasing offices. The expensive cost of auto ownership and maintenance has resulted in a decrease in the average number of cars that millennials purchase. Furthermore, millennials are more inclined to opt for pre-owned vehicles than new ones when traveling in order to reduce their expenditures.

Furthermore, the high cost of new cars deters a significant number of individuals from purchasing them, thereby bolstering the demand for older vehicles. This presents an opportunity for sector participants to establish their dealership networks in the market through a variety of investments. The market for used automobiles is anticipated to expand as a result of the high cost of new cars, concerns regarding affordability, and the growing demand for off-lease vehicles and subscription services from franchises, leasing offices, and car dealers.

Market Dynamics

Global Used Car Market Drivers:

High Vehicle Prices and Affordability Concerns

The automotive industry, particularly the new and used car markets, is significantly impacted by the high vehicle prices and affordability concerns. The average price of new vehicles has increased significCar Subscription years ago. This increase in prices, in conjunction with the escalating auto-loan rates, has rendered both new and used vehicles more unaffordable for a significant number of consumers. Consequently, a greater number of aged cars are remaining on the road than at any other time.

Additionally, the used car market is no longer the cost-effective alternative it was in the past, as the prices of pre-owned vehicles are now more closely comparable to the current prices of new cars. This trend has presented consumers with a challenge in identifying substantial savings by selecting used cars over new ones, particularly for foreign manufacturers and larger vehicles such as SUVs and pickup trucks. A situation has arisen in which purchasing a new vehicle may be a more viable alternative for certain consumers, as a result of the structural inflation in car prices, which is influenced by factors such as supply chain issues and production costs.

Rising Demand for Off-Lease Cars and Subscription Service

In 2022, the car subscription market surpassed $5 billion in size and is expected to expand at a compound annual growth rate (CAGR) of over XX% between 2024 and 2032. The growing popularity of vehicle leasing and subscription services is a significant factor contributing to this growth. These services offer consumers greater affordability and flexibility than traditional car ownership.

Dealers must ascertain the optimal approach to remarketing vehicles as they exit leases, frequently enlisting them in subscription fleets. The conversion of purchasing entities from individual consumers to fleet operators and institutional buyers necessitates that manufacturers and dealers modify their sales processes. As manufacturers and dealers prioritize subscriber retention and loyalty, ongoing subscription revenue becomes more critical than one-time vehicle sales. The car subscription market is also driven by the necessity to maintain and service vehicles on a continual basis.

Additionally, the car subscription market is being influenced by the increasing adoption of electric and hybrid vehicles in order to achieve sustainability objectives. This is due to the fact that subscription services offer consumers a convenient method of accessing these environmentally friendly transportation options.

Global Used Car Market Restraints:

Unorganized Used Car Sales

The development of the organized used car market is significantly impeded by the unorganized used car sales sector

Currently, the unorganized used car industry accounts for the majority of C2C transactions and a substantial portion of the market in the majority of countries, particularly in developing nations such as India, China, Thailand, Brazil, and Mexico. These unorganized players frequently engage in malpractices, such as repainting and dent removal, to conceal vehicle damage and inflate prices, and they lack appropriate inventories. The organized used car market's development is restricted by the fear it instills in buyers. The unorganized players control the majority in India, while the organized sector retains only a 12-15% market share. The profit margins of 8-10% are not as lucrative as those of the U.S. market, and unorganized dealers do not provide any warranty on pre-owned vehicles. This presents a challenge for organized participants to compete effectively.

Moreover, the unorganized sector continues to control a substantial portion of the used car market in India, particularly in rural and smaller cities where organized dealerships may not be present. This enables the unorganized actors to maintain their market dominance.

Global Used Car Market Opportunity:

Growing E-commerce and Online Technologies

A significant growth opportunity is the capacity to offer consumers a seamless shopping experience across a variety of channels, such as in-store, mobile, and online. Customer engagement and sales can be improved by integrating online and offline channels. By automating repetitive tasks such as inventory management, order fulfillment, and customer service, businesses can allocate more time to growth strategies and enhance the customer experience. Ecommerce businesses are presented with a substantial opportunity to expand their consumer base and increase their conversion rates due to the increasing prevalence of mobile commerce, which is anticipated to reach $319 billion by 2020. Businesses can access new consumer bases and revenue streams by expanding their ecommerce operations to international markets, particularly in high-growth regions such as the Asia-Pacific. Data analytics and AI-powered technologies, such as personalized shopping assistants, can assist ecommerce businesses in hyper-personalizing the consumer experience, increasing conversions, and driving growth.

Regional Analysis

Asia-Pacific Dominates the Global Market

The global Used Car market analysis is conducted in North America, Europe, Asia-Pacific, the Middle East and Africa and Latin America.

Asia Pacific: In 2022, Asia Pacific possesses the highest market share at 41.3%. The region's expansion is fueled by the growing demand for pre-owned vehicles in developing nations, including South Korea, China, and India. A low rate of vehicle ownership among millennials due to the costly cost of vehicles, an increase in discretionary income, an easy affordability, and a low population-to-car ratio are all factors that contribute to this growth. The Asia Pacific used vehicle market is dominated by Mahindra First Choice Wheels, Toyota's U Trust, and Maruti Suzuki's True Value.

Europe is anticipated to dominate the global used vehicle market from 2024 to 2032. The region's expansion is fueled by the growing recognition of the advantages of pre-owned vehicles and the availability of affordable financing options. The growth is also being influenced by the growing demand for SUVs and the growing trend of consumers choosing sustainable mobility. Volkswagen's Das WeltAuto, as well as established players such as Mercedes-Benz and BMW, are among the key actors in the European used car market.

North America: In 2022, North America held the largest revenue share of 35.7% in the market. The diverse array of vehicles available in the region, which includes both modern features and older antiques, is the primary factor driving its growth. This selection appeals to a wide range of preferences and budgets, thereby drawing in a greater number of purchasers. The North American used car market is dominated by three major players: Asbury Automotive Group, AutoNation Inc., and Carmax Business Services LLC.

Segmental Analysis

The Global Used Car Market is segmented based on vehicle type, fuel type, distribution channel and size.

The market is further segmented by Vehicle Type into Hatchback, Sedan and SUV.

During the forecast period, the SUV segment is anticipated to experience a compound annual growth rate (CAGR) of 7.8%, with the maximum contribution to the market. A sports utility vehicle (SUV) is frequently classified by its dimensions, including full-size, compact, and sport coupe SUVs. Toyota Fortuner, Hyundai Creta, Maruti Vitara Brezza, and Nissan Kicks are examples of used SUVs. In both the new and used car markets, SUVs are the most sought-after models. Higher ground clearance, improved visibility, superior safety, high engine power, simple access and egress, and off-road capability are the primary characteristics that drive the market demand for SUVs. Furthermore, SUVs are favored due to their off-road capabilities, safety, and spaciousness, among other attributes.

The majority of offline and online sales channels report increased sales of sedan vehicles. Consequently, it is anticipated that the used sedan industry will experience a growth in the coming years. Sedans are distinguished by their luxurious and convenient interiors. The demand for sedans is on the rise as a result of improvements in fuel efficiency, greater speed, lighter weight, more excellent boot space, a smoother ride in cities, and comfort. Furthermore, the industry is experiencing an increase in demand for electric vehicles as a result of more stringent emission regulations. The low cost and accessibility of the majority of sedan-style electric vehicles make them readily available.

The market is further segmented by Fuel Type into Petrol, Diesel and Others.

During the forecast period, the petrol segment is anticipated to expand at a compound annual growth rate (CAGR) of 7.9%, and it currently holds the largest market share. A spark-ignited internal combustion engine is employed in a petrol vehicle. It is intended to operate on petrol and comparable volatile fuels. Today, gasoline is the primary fuel used in the preponderance of automobiles. Furthermore, a substantial proportion of the petrol vehicles are pre-owned automobiles. These fuel-type vehicles are priced at a reasonable level in comparison to diesel and other types of vehicles. The Ford F-150, Honda CR-V, and Toyota RAV4 are among the most widely sold gasoline-powered vehicles worldwide. The desire for petrol cars in the used car market is fueled by low prices, a reduction in engine pollution in comparison to diesel, and a greater availability in the market.

The expansion of transportation services and the trend of automobile rental services are both contributing to the growth of the diesel segment in the market. Mechanical compression causes the internal combustion engine in a diesel vehicle to heat the air in the cylinder, which in turn ignites the fuel. Furthermore, these vehicles consume less fuel than those that operate on petroleum and other fuels. Honda City diesel, BMW X7, and Honda CR-V diesel are among the diesel vehicles that are widely sought after in the used automobile market. Nevertheless, the primary impediments to the expansion of the diesel fuel type in the used car market are the increasing demand for electric vehicles and the tightening of pollution regulations.

The market is further segmented by Distribution Channel into Franchised Dealer, Independent Dealers, and Others (Private Sales, Offline, Online).

The franchised dealer segment is the largest contributor to the market and is anticipated to expand at a compound annual growth rate (CAGR) of 8.9% throughout the forecast period. A franchised dealership is a type of business that sells both new and used vehicles to consumers. Additionally, private used vehicle dealer businesses, including Ture, Inc., AutoNation, Inc., and Cars24, offer multi-brand dealerships in the global market. Several factors, such as accessibility to the vehicle, pre-owned certified vehicles, immediate vehicle delivery, and brand trust, are contributing to the growth of franchised dealers, particularly in the market. The primary trends in the used car market for franchised dealers include the expansion of internet infrastructure, the negotiation of prices, the testing of various products, and the provision of post-sale services.

Independent dealers are dealerships that operate independently and are not affiliated with any specific brand or manufacturer. This type of dealer is prevalent in the vicinity and offers vehicles from numerous manufacturers. Rather, they are referred to as Phillip's previously owned vehicles, Marle's used cars, and Bob Walker's Used vehicles. Furthermore, the expansion of independent dealers in the used automobile industry is driven by the convenience of access to financing and affordability. Independent vendors may have an opportunity to capitalize on the reduced prices and reduced necessity for legal documentation in the used automobile market.

The market is further segmented by size into Mid-Size, Compact and SUVs.

The sport utility vehicle (SUV) category is emphasized as controlling the biggest revenue share in the global market for used automobiles. The market analysis suggests that SUVs are anticipated to enjoy significant growth, with SUVs being quite popular due to their adaptability and rough appeal, particularly in economies such as China where they are highly sought after. Furthermore, SUVs are expected to experience significant increase in the future. The Asia Pacific area, which accounts for the greatest percentage of the global market for used automobiles, notably in countries such as China and India, is a significant contributor to the dominance of SUVs in the market.

Impact of covid-19

When the world witnessed the noble Coronavirus breakout, it disrupted all nations' economies. The government imposed lockdowns to slow the disease's rapid spread. Productions were stopped, all workplaces were closed, public interactions were limited, and temporary manufacturing and trading operations suspensions were implemented globally. Implementing the lockdown and public exchange caused interruption causing a cutting down of the market's operations. The social distancing norms of the government also disrupted the supply chain. Because of lockdowns imposed by the government, businesses and employees could not use the equipment. This forced the farmers to lean towards the help provided by autonomous tractors pushing the autonomous tractor market growth further.

The South Korean nation faced many problems due to the social distancing and public interaction restrictions imposed by the government, which resulted in a workforce shortage. Travel restrictions imposed also restricted the movement of emigrant laborers into the nation. So the country had to ultimately shift towards using autonomous machines to continue their production and operations, to generate income during tough times. But still, during the era of covid, the market had to face a few bumps, such as the level of participation by the companies in the market declined, suppliers and distributors also slowed down their operations, and this negatively affected the farm machinery industry supply chain, resulting in a delay of deliveries of agricultural machinery.

Recent Developments

• May 2024 - The auto assemblers in Pakistan are requesting that the government implement policy changes to ensure an equitable playing field between locally produced vehicles and imported used cars. They contend that the current tax structure provides an unfair advantage to imported used cars.