Check Out How Online Used Car Providers are Helping the Auto Industry
The auto industry saw its sales drop significantly in 2020 due to the COVID-19 pandemic. Lockdowns resulted in thousands of people losing their jobs, and many more can work part-time for much lower wages.
Despite India’s slow growth in the automotive industry, the used car market has garnered much attention. There were over 42 lakh buyers of used cars in 2020.
How have the online used car providers helped the auto industry?
The used car industry’s success can be attributed to online platforms, digital pricing engines, retail networks, and a well-established value chain. In addition, price-conscious consumers had an increased need for mobility, which prompted growth.
Platforms such as Cars24, Droom, Spinny, CarTrade, and CarDekho have digitized the used car industry. A limited step-by-step procedure and options to apply for a used-car loan have given these online used car sellers an edge over their competitors.
As per Modor Intelligence’s report, the market for used cars in India was valued at USD 27 billion in 2020. It is expected to grow to USD 50 billion by 2026, registering a CAGR of 15% over the forecast period.
This target doesn’t seem impossible because a used car loan can be secured at affordable interest rates and payments can easily be calculated using the used car loan interest EMI calculator.
Between April and November of FY21, car sales of new vehicles declined by 26.14 percent, while used vehicle sales increased by 22 percent.
According to Frost and Sullivan’s estimate of the pre-owned car market for FY25, the Indian market will be about 8.2 million to 8.5 million units annually from about 4.4 million units today. That’s more than twice (2.1 – 2.2 times) the market for new cars.
| Passenger vehicle sales in India
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| Year | Used car sales (in millions) | New car sales (in millions) | Ratio |
| FY17 | 3.6 | 3.1 | 1:2:1 |
| FY19 | 4.0 | 3.4 | 1:2:1 |
| FY21 | 3.8 | 2.6 | 1:5:1 |
| FY23 | 5.4 (estimated) | 3.2 (estimated) | 1:7:1 |
| FY25 | 8.2 (estimated | 3.9 (estimated) | 2:1:1 |
Online sites in auto marketplaces have played a vital role in bringing access to consumers with a simple touch. The online used car sellers registered strong sales during the latter half of 2020 and 2021. CarDekho, a pioneer in the online used car market, recorded a Y-o-Y growth rate of about 100% over the last three years.
Kaushik Madhavan, Vice President at Frost & Sullivan, commented, “A multitude of factors primarily drives the stronger demand for second-hand cars. Tier-II and III cities contributing in a big way, pre-owned car loansbecoming available, increased need for mobility, as well as the desire to own a car, which is one of the biggest drivers out there.”
Buying a used car has become less of a stigma in recent years, contributing to this change in consumer behavior. Instead of buying a brand new car that is cheaper, young adults prefer a used car that is more popular. This is because the former has more power, space and is in a higher class.
The ease of buying a used car online has attracted more buyers in the market. The streamlined process and a wide range of used car loans available for purchase have augmented sales in the segment.
You can get a used car loan of up to Rs. fifty lakhs at competitive interest rates. On the lender’s website, you can find out if you’re eligible for a pre-owned car loan. You can also calculate your EMI using the used car loan EMI calculator available on your lender’s website.
To sum up,
India’s auto industry has been revitalized thanks to the boom created by online used car providers.
In the pre-owned vehicle industry, the introduction of digital has dramatically changed the way buyers shop. Although budget and the make of the car continue to be critical factors for purchase, the customer purchase journey has changed.
Therefore, it is safe to say that buying used cars online is a wise idea. To meet your purchase needs, you may also consider applying for easily available used car loans.
